[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
 OIL SPILL IN NEW ORLEANS IN JULY 2008 AND SAFETY ON THE INLAND RIVER 
                                 SYSTEM

=======================================================================

                               (110-167)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 16, 2008

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             WAYNE T. GILCHREST, Maryland
JERROLD NADLER, New York             VERNON J. EHLERS, Michigan
CORRINE BROWN, Florida               STEVEN C. LaTOURETTE, Ohio
BOB FILNER, California               FRANK A. LoBIONDO, New Jersey
EDDIE BERNICE JOHNSON, Texas         JERRY MORAN, Kansas
GENE TAYLOR, Mississippi             GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland         ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California        HENRY E. BROWN, Jr., South 
LEONARD L. BOSWELL, Iowa             Carolina
TIM HOLDEN, Pennsylvania             TIMOTHY V. JOHNSON, Illinois
BRIAN BAIRD, Washington              TODD RUSSELL PLATTS, Pennsylvania
RICK LARSEN, Washington              SAM GRAVES, Missouri
MICHAEL E. CAPUANO, Massachusetts    BILL SHUSTER, Pennsylvania
TIMOTHY H. BISHOP, New York          JOHN BOOZMAN, Arkansas
MICHAEL H. MICHAUD, Maine            SHELLEY MOORE CAPITO, West 
BRIAN HIGGINS, New York              Virginia
RUSS CARNAHAN, Missouri              JIM GERLACH, Pennsylvania
JOHN T. SALAZAR, Colorado            MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            TED POE, Texas
NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New 
BRUCE L. BRALEY, Iowa                York
JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr., 
HEATH SHULER, North Carolina         Louisiana
MICHAEL A. ARCURI, New York          JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
JOHN J. HALL, New York               MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
STEVE COHEN, Tennessee               ROBERT E. LATTA, Ohio
JERRY McNERNEY, California
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland

                                  (ii)

  
?

        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                 ELIJAH E. CUMMINGS, Maryland, Chairman

GENE TAYLOR, Mississippi             STEVEN C. LaTOURETTE, Ohio
RICK LARSEN, Washington              DON YOUNG, Alaska
CORRINE BROWN, Florida               HOWARD COBLE, North Carolina
BRIAN HIGGINS, New York              WAYNE T. GILCHREST, Maryland
BRIAN BAIRD, Washington              FRANK A. LoBIONDO, New Jersey
TIMOTHY H. BISHOP, New York, Vice    TED POE, Texas
Chair                                JOHN L. MICA, Florida
LAURA A. RICHARDSON, California        (Ex Officio)
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Allegretti, Thomas A., President and CEO, American Waterways 
  Operators......................................................    36
Block, Richard A., Secretary, National Mariner's Association.....    36
Dawicki, Eric, President, Northeast Maritime Institute...........    36
Munoz, Mario A., Vice President of Vessel Operations, American 
  Commercial Lines...............................................    36
Stroh, Captain Lincoln D., Sector Commander, Captain of the Port, 
  Sector New Orleans, United States Coast Guard..................     7
Tellez, Augustine, Executive Vice President, Seafarers 
  International Union............................................    36
Watson, IV, Rear Admiral James, United States Coast Guard, 
  Director of Prevention Policy for Marine Safety, Security and 
  Stewardship....................................................     7
Westerholm, David, Director, Office of Response and Restoration, 
  National Oceanic and Atmospheric Administration................     7

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Cummings, Hon. Elijah E., of Maryland............................    52

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Allegretti, Thomas A.............................................    68
Block, Richard A.................................................    83
Dawicki, Eric....................................................    85
Munoz, Mario A...................................................    97
Tellez, Augustine................................................   106
Watson, IV, Rear Admiral James...................................   109
Westerholm, David................................................   116

                       SUBMISSIONS FOR THE RECORD

Allegretti, Thomas A., President and CEO, American Waterways 
  Operators:

  Responses to questions from Rep. Cummings......................    74
  Response to issues raised during hearing.......................    78
Munoz, Mario A., Vice President of Vessel Operations, American 
  Commercial Lines, response to issues raised during hearing.....   104
Watson, IV, Rear Admiral James, United States Coast Guard, 
  Director of Prevention Policy for Marine Safety, Security and 
  Stewardship:

  Response to request for information............................    18
  Response to request for information............................    28

                        ADDITIONS TO THE RECORD

Seaman's Church Institute, Eric K. Larsson, Director Maritime 
  Training and Education, letter to the Subcommittee.............   119
Waits, Emmett, and Popp, L.L.C., Randolph J. Waits, Attorney at 
  Law, letter to Subcommittee regarding invitation of Daniel 
  Dantin to testify..............................................   125

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HEARING ON OIL SPILL IN NEW ORLEANS IN JULY 2008 AND THE SAFETY ON THE 
                          INLAND RIVER SYSTEM,

                              ----------                              


                      Tuesday, September 16, 2008,

                  House of Representatives,
    Committee on Transportation and Infrastructure,
   Subcommittee on Coast Guard and Maritime Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2167, Rayburn House Office Building, the Honorable Elijah 
E. Cummings [Chairman of the Subcommittee] presiding.
    Mr. Cummings. This hearing is called to order. It is my 
understanding that Mr. LaTourette is on his way. We are going 
to get started because we have a vote coming up fairly soon.
    The Subcommittee will come to order. Before we begin this 
morning, we commend the United States Coast Guard for the work 
they are undertaking, even now, to aid those who have been so 
terribly affected by Hurricane Ike. It is in these times of 
national emergency that we see the dedication that our thin 
blue line at sea, the Coast Guard, brings to its work aiding 
those in peril, and we thank them for their heroic efforts.
    The Subcommittee convenes today to examine the 
circumstances surrounding the spill of nearly 300,000 gallons 
of Number 6 fuel oil into the Mississippi River near New 
Orleans on July the 23rd. We will also take a broader look at 
the significant safety issues in the towing industry 
highlighted by the accident that caused the spill.
    The July 23rd spill occurred when a towing vessel pushed a 
tank barge into the path of an oncoming tanker. The towing 
vessel involved in the casualty, the Mel Oliver, was not being 
operated at the time of the collision by a properly licensed 
master. Instead, it was being operated by a person holding only 
an apprentice mate's license, who was not authorized to operate 
a towing vessel without the presence of a licensed master in 
the wheelhouse.
    DRD Towing, the firm operating the Mel Oliver, has a 
history of operating vessels without properly licensed 
personnel. Less than two weeks before the accident involving 
the Mel Oliver, DRD was apparently illegally operating the 
towing vessel Ruby E with a person holding only the apprentice 
mate's license when the vessel sank.
    DRD Towing has also been cited by the Coast Guard for 
operating towing vessels without properly licensed personnel in 
several previous occasions. DRD was a member of the American 
Waterways Operators, the industry trade association for the tug 
and barge industry, at the time of the collision between the 
barge being pushed by Mel Oliver and the tank vessel, and at 
the time of the sinking of the Ruby E. However, in May, the 
firm failed the safety audit that AWO requires as a condition 
of membership in its association. The audit is the cornerstone 
of the program AWO terms the Responsible Carrier Program, which 
it argues is designed to ensure safety in the towing industry.
    Only after the accident between the Mel Oliver and the tank 
vessel did the Coast Guard systematically check other DRD-
operated towing vessels in the New Orleans area to ensure that 
they were operated by fully licensed personnel. However, the 
fact that this firm could sink one towing vessel and then, less 
than two weeks later, cause a major collision with another 
towing vessel, when neither was being operated with properly 
licensed personnel, and that too, after having been cited on 
previous occasions for such violations suggests to me that 
either this firm was truly negligent or that its managers felt 
that there was little risk of being caught while operating 
without properly licensed personnel.
    One of the deck hands on the Mel Oliver tested positive for 
the use of illegal drugs. This is likely an incidental finding. 
However, to be frank, there are widespread claims among those 
who work in the towing industry that the operation of the 
towing vessels without properly licensed personnel is common 
and that drug use is prevalent in the industry, and I must say 
that that is a very, very, very, very troubling and very sad 
commentary.
    Similar claims that violations of the rule that forbids 
licensed personnel from working more than 12 hours in a 24-hour 
period are also common. Simple mathematics would suggest that 
it would be very difficult for licensed individuals to comply 
with this limitation when there are only two such personnel on 
a towing vessel.
    At the time of the accident, on July 23rd, the towing 
vessel, Mel Oliver, was chartered by its owner, American 
Commercial License, to DRD under a bareboat charter and then 
hired back by ACL on a fully found charter. This arrangement 
does not appear to have been designed to generate revenues for 
ACL. Rather, it appears to have been designed to enable ACL to 
operate its vessel at the cheapest possible cost, by shifting 
maintenance responsibilities and, more importantly, the hiring 
of crew members into DRD, a firm that was obviously ill 
prepared to meet these responsibilities, but with which ACL had 
nonetheless done business for a decade.
    According to statistics provided by the Coast Guard, 
between 2000 and 2008, ACL, which is currently the second 
largest firm in the towing industry, has had eight deaths or 
missing persons on vessels for which it was the managing owner, 
more than on vessels under any other managing owner in the 
towing industry save for fatalities arising from a single 
accident involving another firm in 2001.
    We have before us today a very troubling portrait of an 
industry that is essential to commerce in our Nation. However, 
unlike in many instances in which problems are prevalent within 
a given industry, the Coast Guard appears to have all the 
authority it needs to deal with many of these issues. The Coast 
Guard has had the authority since 2004 to set hours of service 
limits on towing vessels but has not chosen to exercise this 
authority, despite widespread agreement that human factors, and 
particularly fatigue, are among the most prevalent of all 
causes of casualties on towing vessels.
    Similarly, Congress passed a law in 2004 finally bringing 
towing vessels under inspection requirements, requirements from 
which vessels currently in operation had been exempt for 
decades simply because they were powered by diesel engines 
rather than steam engines.
    As part of the inspection process, the Coast Guard will be 
required to set manning levels. However, now four years later, 
the Coast Guard has not even published notice of proposed 
rulemaking to initiate the effort to complete the rules needed 
to create the inspection process. This rulemaking is one of 
more than 100 pending within the service.
    A major part of effective leadership is having a sense of 
urgency and acting on that urgency, and because of the failure 
to act on that urgency, I think that that is why we are here 
today discussing the problem that we have today, in part.
    Today, we will examine these issues in more detail and 
identify the steps that need to be taken to ensure that the 
towing industry is as safe as it can possibly be. We look 
forward to hearing from representatives of the Coast Guard and 
NOAA, as well as the American Commercial Lines, the American 
Waterways Operators, the Northeast Maritime Institute, the 
Seafarers International Union, and the National Mariners 
Association.
    I note that we invited DRD to attend this hearing. DRD's 
owner, Daniel Danton, responded to the Subcommittee's request 
for him to appear through counsel, stating the following: 
``Although the Department of Justice has given Mr. Danton no 
indication that he is a target or subject of any investigation, 
given the ongoing United States Coast Guard formal hearing and 
the United States Justice Department's involvement in this 
matter, Mr. Danton would, if subpoenaed to the congressional 
hearing, refuse to testify and invoke the Fifth Amendment 
privilege against self-incrimination.''
    Having received that letter, I decided that we would not 
subpoena him in today because I think the letter speaks for 
itself and, from a very practical standpoint, it makes more 
sense for us not to waste our time.
    I ask that DRD's full letter to the Subcommittee be 
included in the hearing record and, without objection, it is so 
ordered.
    With that, I recognize our distinguished Ranking Member, 
Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    On July the 26th of this year, two vessels collided in the 
middle of the night, resulting in the release of nearly 300,000 
gallons of fuel oil into the lower Mississippi River near New 
Orleans. The Coast Guard has completed a preliminary 
investigation into the cause of the collision and a more 
detailed investigation is ongoing.
    While the circumstances leading to the collision raise 
several questions for the Subcommittee to examine this morning, 
I would be remiss if I did not recognize the comprehensive and 
successful response efforts by the Coast Guard, NOAA's Office 
of Response and Restoration, and the State and industry 
officials.
    The recent spill in New Orleans was more than five times 
larger than last year's spill in the San Francisco Bay. The 
spill did cause significant economic damages due to the closure 
of the Mississippi River and the subsequent impact on local and 
upriver industries and agriculture. Yet, through the combined 
efforts of Federal, State, and industry stakeholders, damages 
to the local environment were kept to a minimal level.
    The incident that resulted in the oil spill involve a 
towing vessel which is currently not a class of vessels that 
are inspected by the Coast Guard. Congress has directed the 
Coast Guard to establish a safety management system for towing 
vessels nearly four years ago; however, no system has been 
developed to date. I hope that the witnesses will give the 
Subcommittee an update on the status of this rulemaking and the 
ongoing discussions between the service industry officials and 
mariner groups. It is important to note, however, that no 
inspection regime would prevent individuals determined to 
operate vessels in violation of the law, which appears to be 
the case in this incident.
    In previous hearings before this Subcommittee, witnesses 
have discussed the difficulties in maintaining sufficient 
number of maritime workers in the inland barge industry. I am 
curious to hear from the witnesses today whether those 
workforce pressures contributed to this or other incidents, and 
whether the looming implementation of the TWIC card will 
exacerbate any workforce shortage.
    The Subcommittee has also been concerned for some time 
about the solvency of the Oil Spill Liability Trust Fund. On 
several occasions, the Subcommittee has required the Coast 
Guard to study issues that might have a negative impact on the 
Fund. One such impact may be the unprocessed claims for damages 
that resulted from Hurricane Katrina and those that may be 
forthcoming from this year's storms.
    The recent oil spill in New Orleans underscores the 
importance of planning and preparation on the part of 
government officials and vessel operators to respond to oil 
spills and their effect in the future. I want to thank the 
witnesses and the organizations that they represent for their 
continued work to prevent future oil spills and to minimize the 
impacts that happen when those occur.
    Mr. Chairman, I do want to express my concern, as I have 
expressed in a couple of other hearings. It makes me nervous 
when we have subpoenaed witnesses, people that are involved in 
active litigation against other witnesses or other people who 
are not witnesses, and again that appears to be the case. The 
majority has, my understanding, subpoenaed NMI, which is in an 
active legal dispute with American Commercial Lines. I know 
that the Chairman is more than fair and he recognizes that 
these forums are not to be used to give one side a leg up, if 
you will, in litigation, and I would hope that you continue 
that record of fairness today, and I yield back my time.
    Mr. Cummings. I want to thank the gentleman for his 
statement.
    One of the things, as you and I, as attorneys, and trial 
attorneys, at that, know--I am very, very sensitive to those 
kinds of issues that you just raised, and one of the things 
that I try to do is try to make sure that we are fair to the 
witnesses, just like you just said, but at the same time 
without prejudicing them, bringing prejudice upon them, that we 
still do our job. So it is kind of a tricky balance but, that 
being said, we will proceed very carefully. I want to thank 
you.
    It is interesting. Every morning I read, as part of my sort 
of daily devotions, you might call them, little passages, and 
it just so happens, as I was listening to Mr. LaTourette, I 
couldn't help but think about something that I read this 
morning. It says accept the fact that you can make excuses and 
you can make money, but you can't do both.
    I think what I am concerned about, to the Ranking Member, 
is that, as I listened to your statement, I just want to make 
sure that we are doing everything in our power to make sure 
these things don't happen again. You have heard me say many 
times that I worry about this Country and how, in so many 
areas, we have fallen into a culture of mediocrity. I think 
Katrina showed us how bad it can get when the rubber meets the 
road, and then when the rubber meets the road you discover 
there is no road. I think we see it in what is happening here 
today in our financial world, and we can go down the line. I am 
not blaming anybody, I am just saying we can do better.
    And I say this at this juncture not knocking my good 
friend, it is just that I believe that I want our witnesses to 
come forth with suggestions as to how we can solve these 
problems. We cannot have oil spilled all over our waterways, I 
am sorry. We can do better than that. And we can make excuse 
after excuse after excuse, but we have to put in the kind of 
rules. We must have a sense of urgency. We must do the things 
that we need to do to ensure that these things don't happen. 
Yes, there are going to always be mistakes. There is always 
going to be human error, I got that. But this is our watch. 
This is our watch. We are watching our environment; we are 
watching our Coast Guard. It is our watch. I want to make sure 
that those who come forward come forward with suggestions as to 
how we can address these issues.
    With that, Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman.
    I want to thank our witnesses for being here. Although, at 
times, I am probably the hardest guy in the room on the Coast 
Guard, I also want to let you know that I have the most empathy 
for you, and I realize that Congress and the Administration, on 
a regular basis, give you more jobs to do and the budget 
increases often don't match that.
    A couple things I would like you to mention in your 
testimony, though, Admiral and Captain, is what are the fines 
and/or penalties for operating a vessel without a licensed 
captain and/or without the proper tonnage of that captain, the 
reason being that I suspect--I certainly don't know--that there 
are companies out there who are saving money by operating 
vessels without a licensed captain or with someone with a 
smaller license than the vessel requires, which in turn gives 
them an economic advantage, and we end up punishing the people 
who are living by the rules and we end up, by lack of 
enforcement, giving people who don't live by the rules a leg 
up.
    The second thing I would hope you would address, in going 
back to that, I really do empathize with your challenges, but I 
do remember from the old days that the Coast Guard used to 
conduct twice daily harbor patrols in New Orleans; at least one 
during the day, at least one at night. Part of that was to look 
for load line violations, oil spills, but also part of it, on a 
regular basis, was simply stopping vessels to check and see if 
the person in the wheelhouse was licensed. I am just curious, 
given the demands on your time with all the new missions and 
also the high price of fuel, and my memory that during certain 
portions of the year the boat crews were told, hey, don't get 
underway unless it is an absolute emergency. Is that a 
contributing factor to what might be a lack of enforcement in 
this area that might have been a contributing factor to this 
accident?
    Again, I am not looking for the Coast Guard to beat up on 
themselves, but if it is a financial problem that is resulting 
in a lower exposure out on the river due to funding, then it is 
something the Congress certainly needs to be aware of and 
hopefully we can address in the next budget.
    So, again, I want to thank our witnesses for being here.
    Mr. Chairman, I want to thank you for calling this hearing.
    Mr. Cummings. Ms. Richardson.
    Ms. Richardson. Yes. Good morning. Thank you, Mr. Chairman.
    Mr. Chairman, I want to thank you and Ranking Member 
LaTourette for holding this hearing on the Mississippi River 
oil spill which took place at 1:30 a.m. on Wednesday, July 
23rd, 2008, near the city of New Orleans. I, like many of my 
colleagues here today, view the maritime industry as an 
economic lifeline to my congressional district and to many 
districts throughout this Country.
    While this accident may have occurred in one place, what 
was evident to me when I was attending this Committee's field 
hearing last year on the COSCO BUSAN is that the tragic 
maritime accidents not only put our environment and our human 
health in jeopardy, but it also has the ability to devastate 
our national economy as well.
    Given the serious nature of maritime accidents, all must be 
done to hold those responsible in accordance with the law and 
actively review the Coast Guard's response after the accident 
took place. It is my hope today that the lessons learned from 
the COSCO BUSAN disaster are being applied, and I want to hear 
in the testimony today what was learned, what did you apply 
that hopefully helped us respond better in this particular 
situation.
    Today's witnesses' testimony will provide, hopefully, an 
accurate assessment of what exactly transpired on the morning 
of July 23rd on the Mississippi. I would like to remind those 
giving testimony that you sit here today not just in front of 
this Committee, but in front of the entire American people who 
are really, this is one accident after another accident after 
another accident.
    So I concur with my colleagues that I really would like to 
hear an honest answer. If there is something that we need to do 
in terms of financially providing an adequate budget for you to 
do your job effectively, you need to tell us, because this 
Committee stands willing and ready and able to address this 
issue, but we can only do it if there is no fear from the 
Administration, there is no golden cows out there. We need to 
know from you honestly do you have the resources and do you 
have the capability to do this job effectively, because we have 
had one too many accidents.
    Thank you, Mr. Chairman.
    Mr. Cummings. I want to just take a moment to echo what Mr. 
Taylor and Ms. Richardson just said, and I am sure Mr. 
LaTourette joins with me in this. We want the Coast Guard to be 
the very, very best that it can be, and I am really, really 
curious about this rulemaking, I am curious about the things 
that Mr. Taylor raised, and we will fight for the resources the 
Coast Guard needs.
    But I want to be clear that I realize that resources are 
not just the answer. See, if resources were the answer, a whole 
lot of things in our world would be resolved. You must couple 
resources with motivation. So whatever it takes for us to get 
there, we want to get there. So you need to let us know, 
because we will fight for those resources because we know that 
the Coast Guard will use them effectively and efficiently, and 
then we will hold you to a high standard. But we have got to 
know what you need.
    So, with that, we will call on Rear Admiral Watson, James 
Watson, IV, who is the Director of Prevention Policy for Marine 
Safety, Security and Stewardship, with the United States Coast 
Guard, and Mr. David Westerholm, who is the Director of the 
Office of Response and Restoration with the National Oceanic 
and Atmospheric Administration. We welcome your testimony.
    I understand, Captain Stroh, you are standing by just in 
case there are questions that you may have to answer. Is that 
right?
    Captain Stroh. I have an opening statement.
    Mr. Cummings. You have an open statement?
    Captain Stroh. Yes, sir.
    Mr. Cummings. Fine. We will hear from you. Why don't we 
start with you? We will start with you, since I didn't know you 
had one.
    Captain Stroh. Yes, sir.
    Mr. Cummings. All right.

   TESTIMONY OF CAPTAIN LINCOLN D. STROH, SECTOR COMMANDER, 
 CAPTAIN OF THE PORT, SECTOR NEW ORLEANS, UNITED STATES COAST 
   GUARD; REAR ADMIRAL JAMES WATSON, IV, UNITED STATES COAST 
    GUARD, DIRECTOR OF PREVENTION POLICY FOR MARINE SAFETY, 
SECURITY AND STEWARDSHIP; DAVID WESTERHOLM, DIRECTOR, OFFICE OF 
  RESPONSE AND RESTORATION; NATIONAL OCEANIC AND ATMOSPHERIC 
                         ADMINISTRATION

    Captain Stroh. Good morning, Chairman Cummings, Ranking 
Member LaTourette, and other Members of the Subcommittee. Rear 
Admiral Whitehead of the Eighth Coast Guard District sends his 
respects. He was unable to attend today's proceedings as he 
responds with Sector Houston to the aftermath of Hurricane Ike.
    As the Coast Guard's local commander for Sector New 
Orleans, I am the Federal On-Scene Coordinator, FOSC, for oil 
spills in the Southeast Louisiana coastal zone, including the 
Mississippi River. As FOSC, I coordinate Federal Government's 
response to spills, work closely with State and parish 
governments, and lead a unified command of responders, 
including the responsible party, to mitigate the effects of 
spills, clean the environment of hazardous substances, and re-
establish the marine transportation system.
    The DM 932 oil spill was a challenging spill in a complex 
river environment, affecting a critical waterway vital to this 
Nation's economy. Federal, State, and parish agencies came 
together with the responsible party to quickly marshal over 
2,000 oil spill responders to clean over 100 miles of river, 
over 1190 vessels, and salvage a leaking, mangled barge in 80 
feet of water, all while beginning to move ship traffic on day 
five, with ship traffic back to normal in day seven.
    The Coast Guard's new sector organization served this 
incident well. As sector commander, I had all the authorities 
and all the Coast Guard resources at my disposal, and I used 
them: the Vessel Traffic Center to manage traffic, the Command 
Center to close the port, the small boat station to enforce the 
safety zone, and the air station to overfly the spill zone, the 
pollution responders to respond, the casualty investigators to 
investigate, the marine inspectors to oversee the salvage, the 
safety staff to oversee safety, Coast Guard cutters for on-
scene presence, the planners to create action plans, the 
logistics personnel for unified command support, the 
auxiliarists to support the supporters, and reservists to 
backfill the active duty.
    My authorities as Federal On-Scene Coordinator, Search and 
Rescue Mission Coordinator, Officer in Charge Marine 
Inspections, and Captain of the Port were all used in a 
complimentary fashion as this event unfolded. Mission execution 
was enhanced through this organization and its single 
repository for authorities.
    Though the salvage and spill response could be called a 
success, the reason for this spill must be investigated and a 
cause determined. My investigators, in collaboration with the 
Eighth Coast Guard District's formal investigation, are working 
with the National Transportation Safety Board to find that 
cause and learn from it.
    Thank you for the opportunity to appear here today, and I 
am happy to answer any questions after the other Members give 
their opening remarks.
    Mr. Cummings. Thank you, Captain Stroh.
    Rear Admiral James Watson.
    Admiral Watson. Good morning, Chairman Cummings, Ranking 
Member LaTourette, and other Members of the Subcommittee. As 
the Coast Guard's Director of Prevention Policy, my first 
reaction to the news from New Orleans on the morning of July 
23rd was to ask how such an accident could happen. My next 
reaction was to ask appropriate people from both the Government 
and the industry to make sure it doesn't happen again.
    After speaking to the NTSB and the Eighth Coast Guard 
District, I endorsed doing a district formal marine board of 
investigation. Coast Guard investigators, joined by NTSB 
investigators, began collecting evidence, designating parties, 
and preparing for the public hearing. The chairman of the NTSB 
and the Eighth Coast Guard District commander held a press 
conference on the afternoon of July 23rd to assure the public 
that appropriate investigation actions were being taken. 
Follow-up press releases were disseminated on July 28th and 
August 2nd, with initial findings and release of the VTS radio 
coms with Mel Oliver and Tintomara, the ship that was involved.
    In the meantime, Coast Guard marine safety officers 
systematically visited each of the 18 other DRD vessels to 
ensure they were properly manned with appropriate licensed 
personnel and crew.
    The Marine Board hearing began on August 12th and recessed 
on August 14th after interviewing four witnesses and entering 
62 documents into evidence. Successive hurricanes have 
intervened since then. The hearing is scheduled to resume on 
October 9th and expects as many as 32 witnesses and many more 
documents.
    On September 5th, following two meetings we had with the 
American Waterways Operators, we released the Unlicensed to 
Drive Safety Alert. This is a strong reminder disseminated to 
the towing industry about proper manning and licensing. Admiral 
Allen has directed Coast Guard operations planners to prepare a 
targeted safety enforcement campaign for licensing, manning, 
navigation, and safety equipment. We have currently been 
boarding about 1500 towing vessels annually.
    Thursday of this week, I will meet with the Towing Safety 
Advisory Committee, TSAC, to review the actions taken so far 
and hear their recommendations for other potential actions.
    My experience is that accidents like the collision that 
occurred in New Orleans on the 23rd don't just happen. Numerous 
interventions or safety factors could have prevented the 
accident. It wasn't a natural disaster, it was manmade. Things 
like oversight, leadership, professionalism, standards, and 
even work hours and conditions can make a difference.
    This Subcommittee has provided good oversight in recent 
legislation. First, the United State Coast Guard is authorized 
to require licenses for every towing vessel at least 26 feet in 
length. In 2001, we overhauled the towing vessel operators 
licenses. We phased out the old operator of uninspected towing 
vessel, OUTV, license and created a master of towing vessel 
license that requires a progression from apprentice to mate and 
a minimum of four years experience. We continue to improve upon 
these regulations, and just this month we published an 
amendment to give credit for approved training courses and 
experience as a master of inspected vessels.
    Second, the Coast Guard is authorized to proscribe hours of 
service aboard towing vessels in accordance with Section 409 of 
the Coast Guard and Marine Transportation Act of 2004. The 
Coast Guard has provided crew endurance management training for 
over 2500 mariners and has published a Navigation and 
Inspection Circular. This is a risk-based service hour 
management program and is part of a safety management system 
for a company. The Circular is a stepping stone for towing 
vessel industry management to be prepared for the regulations 
anticipated in accordance with Section 409.
    Third, the Coast Guard is authorized to inspect and certify 
towing vessels in accordance with Section 415 of the CG&MT Act 
of 2004. This massive undertaking requires a new subchapter in 
the Code of Federal Regulations and additional manpower in 
nearly every Coast Guard sector to enforce it. It is comparable 
in scale to the small passenger vessel inspection rulemaking of 
1956.
    The Coast Guard has been working very closely with the 
Towing Safety Advisory Committee (TSAC) and expects to publish 
the notice of proposed rulemaking in 2009. The rule will 
require each company to have a safety management system, 
including crew endurance management. It will allow for third-
party reports, documents, and records to be used during the 
certification process in addition to periodic vessel 
inspections by Coast Guard officers.
    Mr. Chairman and Members of the Subcommittee, thank you 
very much for this hearing. I look forward to answering your 
questions.
    Mr. Cummings. Thank you very much.
    Mr. David Westerholm.
    Mr. Westerholm. Thank you, Mr. Chairman and Members of the 
Subcommittee for the opportunity to testify on the National 
Oceanic and Atmospheric Administration's role in the response 
to the July 23rd, 2008 oil spill on the lower Mississippi 
River.
    I am Dave Westerholm, NOAA's Director of the Office of 
Response and Restoration within the Department of Commerce. I 
appreciate this opportunity to highlight the critical 
contributions provided by NOAA during spills.
    When oil spills into our coastal and inland waters, it can 
harm people and the environment, and cause widespread economic 
effects. The best remedy is to prevent oil spills. But when a 
spill does occur, we must act quickly and effectively to 
mitigate any harmful effects and restore injured resources. An 
effective response based on solid science and smart decision-
making reduces environment, social, and economic impacts, as 
well as clean-up costs. To ensure a quick and effective 
response, we must remain prepared for spills by maintaining 
adequate response capacity and capabilities.
    NOAA provides scientific support coordinators who lead a 
team of NOAA specialists to assist the United States Coast 
Guard in its role as Federal On-Scene Coordinator. This 
scientific coordination is critical, and through experience, 
expertise, and state-of-the-art technology, NOAA forecasts the 
movement and behavior of spilled oil, evaluates the risk to 
resources, and recommends protection priorities and appropriate 
cleanup actions.
    I would also like to mention and thank the incident 
meteorologists, our colleagues at NOAA's National Weather 
Service, who provide on-site weather support throughout spill 
events.
    With respect to the July spill, my office was notified 
shortly after the collision and we provided our first spill 
forecast predictions to the unified command within two and a 
half hours of the event. Over the following month, we provided 
24x7 scientific support, which included daily or twice daily 
trajectories of the spilled oil, information management, 
overflight observations, weather and river flow forecasts, and 
shoreline assessment. Over 200 miles of river shoreline were 
surveyed to support cleanup activities and we quickly mobilized 
our damage assessment and restoration teams to begin collecting 
data and a variety of environmental samples to initiate 
restoration planning as a natural resource trustee.
    In addition to harming wildlife, wetlands, and other 
coastal habitats, this incident resulted in significant 
economic disruption, including extensive waterway closures, 
closure of municipal and industrial water intakes, and 
interference with critical channel dredging operations. The 
NOAA scientific support team helped minimize these disruptions 
and coordinated many of these environmental issues for the 
unified command, including technical issues associated with the 
fate of and behavior of the oil, shoreline and ship cleanup 
strategies, protection of water intakes, and contamination of 
dredge spoils.
    NOAA will continue to assist as needed until shoreline 
cleanup is completed and the response is demobilized. But while 
the operation response phase is winding down, NOAA's role as a 
natural resource trustee under the Oil Pollution Act will 
continue to ensure that the natural resources harmed by this 
spill are restored. To do this, NOAA is working with other 
Federal and State resource agencies and with representatives of 
the responsible party in a cooperative process to develop a 
restoration plan.
    The collision of a chemical tanker and a fuel barge in one 
of the Nation's most critical waterways is a reminder that 
accidents will undoubtedly continue to occur, despite the many 
safeguards and improvements that have been put in place since 
the passage of the Oil Pollution Act. In the past six weeks 
since this incident, NOAA has responded to two dozen other 
spills around the Country. Although the best remedy is to 
prevent oil spills, despite our prevention efforts, the huge 
volumes of oil moving through our waterways makes spills a 
statistical certainty.
    Once oil is released into the marine environment, the best 
that we can do is quickly and effectively mitigate and restore 
any harmful effects. Therefore, responders must be equipped 
with sufficient capacity and capabilities to address this 
challenge. Continuous training, exercises, and investments in 
high-priority response-related research and development will 
ensure that the Nation's response to these incidents remains 
effective.
    In conclusion, I want to thank you for the opportunity to 
discuss NOAA's important role in oil spill preparedness, 
response, and restoration. NOAA's suite of scientific products 
and services and expertise of our personnel are critical in 
mitigating harm, providing information for the allocation of 
response assets, restoring adverse effects on natural 
resources, and informing overall response decision-making.
    At this time, I would be happy to answer any questions that 
you may have.
    Mr. Cummings. I want to thank all of you for your 
testimony. I am just going to have a few questions.
    Rear Admiral Watson, I want you to, if you can, explain to 
me how a firm that sank a boat that was not operated by a 
properly licensed master could then be operating another boat 
less than two weeks later without a properly licensed master on 
board, and that, too, with a history of operating vessels 
without properly licensed personnel.
    Does this situation suggest to you that this firm and its 
personnel didn't think that there was much risk in operating 
without properly licensed personnel, as they were unlikely to 
be caught? I mean, what did you take of that? You made some 
very strong statements in your opening about how these things 
just don't happen, and I am just wondering what your view is on 
that and how do you see the Coast Guard being able to affect 
that utter disregard for not only the rules, but for the safety 
of people who are using our waterways.
    Admiral Watson. Yes, sir. A couple of thoughts come to 
mind. First of all, we are investigating both incidents at this 
time. With only a two-week separation, the two incidents are 
going to be analyzed together, and we are asking the same 
questions. In the interim, we are going to be initiating a 
targeted enforcement program that will assume that perhaps 
there is some need for particular enforcement on these vessels 
for licensing.
    At the time, after the first incident involving DRD, we 
didn't have that kind of an operation in effect. Rather, we did 
more like random law enforcement, random boardings. We do about 
1500 of those a year. This targeting thing would be focused on 
the results of performance by various companies, by perhaps 
various specific captains from time to time, and the casualty 
data that we get to see if there are trends that need to be 
particularly attended to in terms of enforcement.
    Mr. Cummings. In other words, you are saying that if you 
see some type of history developing--and I guess history could 
be one incident--that those folks may come under a little more 
scrutiny than they might normally come under, is that right? Is 
that what you are saying? Is that part of what this initiative 
is about?
    Admiral Watson. Yes, sir. We have had great success in our 
foreign vessel boarding program, our port State control 
program, in which we actually target foreign flag vessels that 
come into our ports based on the information that we have, 
their history, any information we can use that is available 
from the private sector--we use that quite often--obviously, 
past casualty experience, and even some targeting based on the 
last ports of call and so on. So we have not applied that kind 
of a targeting system on the inland rivers, but we have got a 
track record of finding success for that and plan to do it in 
this case.
    Mr. Cummings. Now, you said some things in particular that 
really concern me, and I want to see if the Committee can get 
some clarity on this. Section 3307 of Title 46 states that 
``Each vessel subject to inspection under this part shall 
undergo an initial inspection for certification before being 
put into service. After being put into service, any other 
vessel shall be inspected at least once every five years.'' 
Therefore, a towing vessel must be inspected by the Coast Guard 
or personnel classification society personnel under Section 
3316 at least once every five years.
    Your statement appears to indicate that the Coast Guard or 
class society personnel--and this is where I am going--do not 
need to physically board and inspect a vessel if the owner of 
the vessel has passed a safety management audit. That position 
does not seem to conform with the statute. And one thing we 
have learned from this accident is that the Coast Guard 
personnel need to be on every towing vessel more often, not 
less. So my question is this: does the Coast Guard agree that 
the law requires that the Coast Guard or class society 
personnel board a towing vessel to conduct an initial 
inspection and an additional inspection every five years to 
ensure it is in compliance with all statutory and regulatory 
requirements pertaining to the inspection of that vehicle?
    Admiral Watson. Sir, the regulations, when they are 
promulgated, will comply with the law. The concept of using 
third parties is going to be incorporated into those 
regulations, and we anticipate that there will be examinations 
and audits much more often on these inspected vessels than 
every five years, but the Coast Guard will be attending to 
those vessels at least once every five years.
    Mr. Cummings. Now, does that include boarding?
    Admiral Watson. We separate law enforcement boardings from 
compliance inspections and exams, so our compliance activities 
are done by a qualified marine inspector who is actually 
comparing the material conditions and the operating information 
that is available to them on board to our regulations in a 
periodic exam. These are scheduled inspections.
    The boarding officers which Congressman Taylor referred to, 
they are typically on our small boats; they are coming at odd 
times, unexpected. They are going to be picking and choosing 
which vessels they board based on their experience and, in the 
case of a targeted boarding program, on intelligence, if you 
will, that we will provide them from our command center.
    Mr. Cummings. Let me just ask you about this rulemaking. 
The Coast Guard has been administering the International Safety 
Management System for over a decade. Is it difficult for the 
Coast Guard to develop a safety management system for towing 
vessels and, if so, what makes it so difficult?
    Admiral Watson. Yes, sir. That has been a challenge. We are 
dealing with a population which is tremendously diverse, from 
very small business owners to very large companies like ACL and 
Kirby and Ingram, and there is a lot of variation on how you 
would implement a safety management system which applies to a 
company when you look across that diversity. So it has been a 
challenging thing. We have gotten a lot of support and 
assistance from our Towing Safety Advisory Council, but it has 
taken some time and I know that everyone wants to get these 
regs out. But that has been a big issue for us, sir.
    Mr. Cummings. So the question becomes will we or others be 
sitting in this Committee five years from now having this same 
discussion about getting out regulations, and the question is, 
while it may be difficult, is there anything that the Congress 
can do to push this process along? There are a lot of difficult 
circumstances that happen every day. I mean, if you are telling 
me that the difficulty leads to the impossibility of these 
issues being resolved in a short period of time, I need to 
understand that. Anything short of that, I would like to know 
what it is that we can do to move the process, because I am so 
afraid that we will--it is like there was an old song that said 
you got me going in circles, around and around we go. It is 
like a merry-go-round and we just keep going around and around, 
and in the meantime things do happen, accidents do happen.
    So I am just trying to figure out--and I am not trying to 
beat up on you, I am just trying to have a very practical 
answer to my question, because, again, this is our watch, yours 
and ours, and we want to do what we can to resolve the issue. 
Other than that, we will be here 10 years from now. Well, we 
may not be here, but other people will be here discussing this 
and, sadly, by then, several other accidents may have happened. 
So what can we do?
    Admiral Watson. Yes, sir. I would like to go back to your 
opening statement, where you talked about motivation. I don't 
think any group of people could be more motivated to implement 
prevention type regulations and to have periodic inspections 
and all those things that we do that prevent marine casualties 
from occurring than the Coast Guard. We have to clean up these 
messes. Sometimes there are people that are killed, sometimes 
injured; we have to notify people of lost ones. We are 
motivated to get these things done if they are going to improve 
safety. So there is no doubt that you are dealing with 
motivated people.
    Now, one of the things that you can do is what you are 
doing right now, and that is having a hearing and bringing 
attention to a particular segment that we are working on, and 
certainly that provides additional motivation. Not that we 
haven't been working on this, but we will redouble our efforts 
and try to get these regulations out as soon as possible.
    A significant factor, of course, is manpower for the 
enforcement. The budget request for 2009 has those personnel 
built into that budget. We are hopeful that the Congress will 
see fit to pass that budget and include those personnel that we 
need to get trained up so that, when these regulations hit the 
street, we will have the qualified personnel out there to 
implement them.
    Mr. Cummings. Now, that was a great answer, but you left 
off one piece I think you won't find not one single person, 
Member of this Subcommittee, and probably the Full Committee, 
that would not be for the resources that you talked about. Keep 
in mind, I talked about resources and motivation, and I did not 
want to imply that I did not think that the Coast Guard did not 
have the motivation. But I also talked about resources, and the 
resources now I am asking about is do we need more resources to 
get the regulations done so that we will even need the 
personnel to enforce the regulations? Because I think you are 
going to hear some testimony coming up later that there are 
question marks as to whether the Coast Guard is able to enforce 
policies that make our waterways safe. And if we don't get the 
regulations, we can't get to the enforcement, and I think that 
is the key and that is what I am asking about. What do we need 
to get the regulations done? You follow me?
    Admiral Watson. Yes, sir. You are probably familiar, we 
have a big backlog of regulations projects. We still have 
regulations that haven't been completed that were authorized in 
OPA 90, and that has snowballed because more and more 
authorities have been granted the Coast Guard to do different 
things. This project, towing vessel safety regulations, has 
definitely risen to the top of the heap, and last year, in our 
appropriation for 2008, we were authorized 31 new positions to 
work in our Standards Division to write regulations. We have 
had some challenges hiring the economists that are necessary to 
do all of that background work that needs to be done to satisfy 
the Administrative Procedures Act, which you have to do in 
order to push through regulations. But I think that that 
problem is behind us now. We have got those positions, we have 
hired those people. We have done a lot of the technical work 
that was necessary to do in conjunction with the TSAC. The 
economic work is now in full swing and we hope to get these 
regulations--we will get these regulations out in 2009.
    Mr. Cummings. Thank you very much. Now, I want you to say 
that sentence one more time. Say that sentence one more time, 
because I want to make sure it is on the record. Say that 
again, the last sentence. You didn't say we might, you said we 
will what?
    Admiral Watson. Let me clarify. We will get out the notice 
of proposed rulemaking in 2009.
    Mr. Cummings. Mr. LaTourette.
    Mr. LaTourette. Thank you very much, Mr. Chairman. Just to 
my good friend, the Chairman, just so my opening statement 
wasn't misunderstood, my view is we can have the best 
regulations in the world, the safest ships in the world, the 
best inspections in the world, just like we can with cars and 
traffic safety, but when a 13-year-old decides to get behind 
the wheel of the car, there is not much we can do about it, and 
that, at the end of the day, is what occurred in this 
situation. He wasn't 13, but he didn't have a license.
    Admiral, as a result of the Coast Guard's ongoing 
investigation, do you expect that there will be referrals to 
the Department of Justice as a result of the conduct of some in 
this spill?
    Admiral Watson. Well, I really don't like to speculate on 
that. What I will assure you is that this will be a thorough 
investigation. That is why there is a formal Marine Board of 
Investigation. That also provides transparency to the 
collection of witness testimony and so on. At the end of that 
process, the Board of Investigation will not only make a 
conclusion as to the cause of the casualty, but they will make 
a recommendation to the District Commander on any further 
actions, and that could include administrative procedures 
against a licensed personnel or multiple licensed personnel, or 
it could include, if there is evidence of a crime, a referral 
to the Justice Department, the U.S. Attorney.
    Mr. LaTourette. But let me ask you this, because I am kind 
of a simple guy. Is driving a boat without a licensed captain 
and without the proper credentials, is it a crime today? The 
Chairman is asking you what we need to do. If we haven't made 
it a crime, do we need to make it a crime?
    Admiral Watson. Well, it is a violation of 46 C.F.R., which 
requires the company to ensure that you have a licensed master, 
and if you have gone beyond the limits of your license, you 
will be taken to a hearing with an administrative law judge to 
see if you should still hold that license as a responsible 
merchant marine. But I don't know about the crime part, sir, I 
really don't.
    Mr. LaTourette. I got that you can have bad things happen 
in your life, but can you go to jail? You don't think so, is 
that what you said?
    Admiral Watson. Sir, I don't know specifically what the 
criminal cite would be for that.
    Mr. LaTourette. Okay. Well, maybe, Chairman, we need to 
make it a crime. The drunk driver who causes an accident goes 
to jail. The guy who drives a boat and creates an oil spill 
should probably go to jail if they are not properly licensed 
and they have broken some regulation.
    We had a hearing a little while ago, Admiral, where the 
National Transportation Safety Board came before the 
Subcommittee and, I thought in one of the biggest power grabs 
in the world, attempted to tell us that they had legislation 
that would give NTSB primacy in Federal regulation of a 
maritime incident, and that was in the aftermath of the San 
Francisco spill that Ms. Richardson was talking about. Did NTSB 
decline to conduct an investigation into this spill?
    Admiral Watson. No, sir, not at all. Actually, NTSB would 
have been quite willing to investigate this casualty. As it 
turned out, we had initiated the formal Marine Board of 
Investigation before the NTSB board member, who was the 
chairman that day, arrived in New Orleans, so he worked it out 
with the District Commander and it was decided to go ahead with 
the Coast Guard's process.
    Now, one of the things coming out of the last hearing on 
that is that we should work out a new Memorandum of 
Understanding between us and this is, I think, going to be 
characteristic of how this MOU is going to be written. We are 
going to try to combine the best of both organizations' methods 
and experience, and even technologies for each marine casualty. 
We found that there are good things about NTSB's processes and 
procedures that can occur right up front in collecting evidence 
from onboard the vessels and so on, but that the Coast Guard 
Marine Board hearing, which also is a good thing in this kind 
of a case, is actually not part of an NTSB process, but 
provides a way for public hearings right in the beginning of a 
marine casualty to collect evidence from witnesses. And then 
both agencies can go and do their independent analysis and 
produce separate reports at the end, and that is how we plan to 
proceed with this particular casualty.
    Mr. LaTourette. So at the end of that rather lengthy 
answer, the fact of the matter is the system we have in place, 
subject to a new MOU, is working pretty well, would that be 
right?
    Admiral Watson. Yes, sir. I think that this case 
demonstrates that.
    Mr. LaTourette. Perfect. Last thing that I want to talk to 
you about, Admiral, is under the Oil Pollution Act of 1990, 
liability for removal costs and damages resulting from a 
release of oil rests with the responsible party, and the 
responsible party is defined, in the case of a vessel, any 
person owning, operating, or demise chartering a vessel. My 
question is, under the terms of a demise charter, does any or 
all liability remain with the vessel owner, as opposed to the 
entity that takes operational control of the vessel?
    What I am concerned about is that the way I read the Oil 
Pollution Act of 1990, it is both the owner and the operator 
that are responsible, and I am concerned that this demise 
charter is somehow a loophole that would relieve the owner of 
the vessel from participating in the liability. That ties into 
my whole set of concerns about the solvency of the Trust Fund.
    Admiral Watson. OPA 90 made it very clear to us and the 
responders who the responsible party is, and in this case it 
was ACL because they owned the barge and were in control of the 
oil. After all of the investigations and deliberations with the 
National Pollution Fund Center, there could be some shared 
liability between the owner and the operator, but I really 
can't comment on how those cases come out or specifically what 
OPA 90 directs in that area because it is sort of an after-the-
face, behind-the-scenes issue as far as the Coast Guard is 
concerned, except for our National Pollution Fund Center.
    Mr. LaTourette. Could you just have somebody--but not 
today--take a look at that? My concern is that that demise 
charter technique is a way to offload somebody's 
responsibility. I am a big believer that everybody should be 
involved that is involved, but if there is some technique 
through this demise charter process that relieves somebody that 
should be participating in the cleanup, I would just like 
whatever the service's response to that is.
    [Coast Guard insert follows:]

    [GRAPHIC] [TIFF OMITTED] T5023.024
    
    Mr. LaTourette. Mr. Westerholm, just so you don't feel 
ignored, your office, Response and Restoration, did you receive 
a reduced level of appropriations in this fiscal year than you 
had the year before?
    Mr. Westerholm. Yes, sir, we did. Since fiscal year 2004, 
we have had about a 30 percent reduction, and specifically in 
2008 we had a base budget of $11.5 million, which was 
approximately $5.3 million below the fiscal year 2008 requested 
level.
    Mr. LaTourette. And has that had an impact in terms of the 
preparedness and response capability that that office has?
    Mr. Westerholm. It has. I think both the San Francisco 
spill and this most recent spill illustrated some of that and, 
briefly, it comes down to both capacity and capabilities that I 
mentioned earlier. The capacity is the number of people that we 
can bring to a spill or the number of simultaneous events that 
we can do at one time. In this case, we notice we did not have 
the capability to respond to two simultaneous major oil spills, 
and in the capability piece our modeling for subsurface oil, in 
particular in New Orleans, we had a great two-dimensional 
modeling for the surface oil which was going down the currents, 
but being a heavier oil, some of that was subsurface and we had 
not been able to beef up that capability.
    Mr. LaTourette. If this Congress is unable to complete its 
appropriations work in the next 14 days and there is a 
continuing resolution, you will be frozen at $11.5 million and 
those same limitations, you would expect, would apply?
    Mr. Westerholm. Yes, sir.
    Mr. LaTourette. Thank you.
    Thank you, Mr. Chairman.
    Mr. Cummings. Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman.
    I should have guessed that you would have prepared 
statements, so I am going to have to restate my questions 
again.
    What is the fine for operating a vessel of this size 
without a licensed operator?
    Second, I am curious whether or not the Coast Guard still 
conducts daily and nightly harbor patrols at Port New Orleans.
    I am curious whether or not the high price of fuel--because 
my memory is that fuel was peaking about then--did the high 
price of fuel cause the Coast Guard to curtail its operations 
around this time?
    Lastly, I am aware that there is a vessel traffic service 
in the New Orleans area. I am curious if your vessel traffic 
operator had issued any warnings to that vessel in the hours 
before this or even the days before that. Was there a pattern 
of reckless behavior by that vessel immediately before this 
that might have triggered someone's suspicions that an 
unlicensed person was operating it?
    Lastly, going back to Mr. LaTourette's question, I am aware 
that there is something called a Certificate of Financial 
Responsibility that tracks that cargo. Should that cargo end up 
in the water, you have got a paper trail as to who is going to 
pay the fine. Does the Certificate of Financial Responsibility 
also say who is going to put a licensed person on that vessel? 
Who is responsible for either supplying or, in this case, not 
supplying a licensed person on that vessel? And who pays the 
fine for that, would it be ACL, would it be the operator, would 
both be responsible?
    Admiral Watson. Yes, sir. I will those questions for you. I 
will start with your question about penalties. There is a civil 
penalty associated with the unlicensed being at the helm; it is 
a minimum of $2,000 per day, up to a maximum of $10,000. We 
also can issue and start suspension and revocation proceedings 
against that mariner to take away his license.
    Mr. Taylor. How about the firm that allowed this to happen?
    Admiral Watson. Likewise as well.
    Mr. Taylor. Who pays the fine, the firm, the operator, 
both?
    Admiral Watson. Both, sir.
    Mr. Taylor. Okay.
    Admiral Watson. That is the penalty side.
    As far as harbor patrols, we conduct weekly harbor patrols, 
so we don't do the daily ones as we had before. Fuel is not an 
issue on those; we have plenty of----
    Mr. Taylor. Admiral, the reason I say that is I just happen 
to have witnessed a football game the other day that maybe you 
guys wouldn't want to remember. It happened at Kings Point, New 
York. But I did notice that the Kings Pointer has been tied up 
for some time because of the high cost of fuel. So I have got 
to believe that that is not unique to that institution. But you 
tell me that was not a factor in Coast Guard inspections?
    Admiral Watson. No, sir.
    Mr. Taylor. Okay.
    Admiral Watson. Next question about the Vessel Traffic 
Center, hours before the incident, there were no unusual 
maneuvering by the vessel; it was being loaded with fuel. It 
left the dock, proceeded across the river, headed upbound on 
the Mississippi River. Just moments before the collision was 
the unusual activity, and the Vessel Traffic Center was 
engaged, was putting out, trying to hail the vessel, 
unresponsive, and were very active in trying to advise and 
essentially tell that vessel what to do. They were also talking 
with the tank ship all the time, as well, as the collision 
unfolded.
    Mr. Taylor. Okay.
    Admiral Watson. And then the last question about the 
Certificate of Financial Responsibility, that particular towing 
vessel, that size, is not required to have one, and there is 
not tied to the manning issue at all.
    Mr. Taylor. Let's back up to that issue. I realize some of 
these questions are going to be geared towards the owner of the 
vessel, but going back to Mr. LaTourette's questions, it sure 
strikes me as strange that someone would rent at least a 
million dollar vessel for a dollar a day, then turn it back and 
pay that person to operate it for them. And we all learn from 
things that have happened and mistakes that have happened. Is 
the Coast Guard looking into the possibility that there is an 
unintended loophole in the law that encourages some firms to 
engage in this sort of behavior to either save money on 
insurance, on crewing costs? There has got to be something that 
would cause a company to do this transaction, and I am curious 
as to what you think it is and if you have made any 
recommendations to this Committee or to anyone in Congress as 
to try to close that loophole.
    Admiral Watson. Sir, the formal Marine Board of 
Investigation is set up to do those kinds of analyses and 
interview many, many more witnesses than we normally do for a 
marine casualty. This is an issue that is being asked; it is 
going to be investigated in connection with this particular 
casualty, and if it appears that this is a loophole, that 
report will be acted on up in Coast Guard Headquarters by 
policy makers there to commence whatever is necessary to fill 
that loophole.
    Mr. Taylor. Mr. Chairman, just one quick follow-up. I am 
curious, on the Certificate of Financial Responsibility, I am 
guessing that the barge had one, but the tow boat did not. Is 
that correct? You said that that vessel was not required by law 
to have one.
    Admiral Watson. Yes, the barge would have had a COFR, but 
the tow boat would not. It was over 300 tons.
    Mr. Taylor. Okay, so what size vessel, self-propelled 
vessel, would be required to have a Certificate of Financial 
Responsibility?
    Admiral Watson. It would be a 300 ton vessel is the minimum 
size to need a COFR, a Certificate of Financial Responsibility.
    Mr. Taylor. And as a matter of curiosity, does a 
Certificate of Financial Responsibility--I realize it covers 
this is who you are going to call and this is who you are going 
to fine if there is a spill. Does it also include crewing of 
the vessel with a properly licensed crew?
    Admiral Watson. No. A Certificate of Financial 
Responsibility is just a document that proves that the company 
that operates a vessel over 300 gross tons has insurance.
    Mr. Taylor. Okay.
    Thank you, Mr. Chairman.
    Mr. Cummings. Thank you.
    Mr. Coble.
    Mr. Coble. Thank you, Mr. Chairman. Mr. Chairman, as 
ofttimes the case, I am between Judiciary and Transportation, 
and today is no exception. I am sorry for my belated arrival.
    Admiral,--good to have you all with us, by the way--are the 
licensing problems discovered aboard the Mel Oliver an isolated 
incident or is it a common problem industry-wide?
    Admiral Watson. We looked at our numbers for the last five 
years and we found that there have been years where we have had 
as many as seven people discovered during random boardings who 
were operating a vessel with the wrong license. In the last 
year there were three. We have also looked at our casualty data 
and discovered that there have been licensing issues discovered 
in investigations of marine casualties, and I think the numbers 
there are on the order of one or two.
    So it is a concern and we haven't done any specific 
targeted investigations for this particular issue. We plan to, 
but the numbers haven't stuck out at us in the last five years.
    Mr. Coble. Thank you, sir. Walk us through, Admiral, if you 
will, the process of the inspection of towing vessel rulemaking 
has taken, A. I have been told that there has been a 
collaborative effort with industry, but I would like to 
ascertain the level of involvement and input.
    Admiral Watson. The industry has been very involved. We 
have got a committee, a workgroup that is subordinate to the 
Towing Safety Advisory Committee that has had over 100 
different participants from across the industry, including 
labor and management and other government agencies, just a 
whole variety, and we have really made a strong effort to be 
inclusive in the process of drafting these regulations. Part of 
what we hope will be the benefit of that is when the proposed 
rule comes out, we hope that there won't be a huge number of 
comments that say we should rewrite those proposed rules; we 
hope we can go quickly to the final rule.
    Mr. Coble. I got you. How would the proposed transfer of 
primacy to NTSB impact the Coast Guard's capabilities to carry 
out investigations and to, therefore, enforce U.S. laws?
    Admiral Watson. Well, quite frankly, I haven't spent a lot 
of time considering that outcome, but I think it would have a 
dramatic effect. It would undermine our regulatory program 
because we wouldn't have our investigators working directly 
hand-in-hand with the inspectors and with the captain of the 
port. So I think it would significantly degrade our program.
    Mr. Coble. I am inclined to agree with that. Thank you, 
Admiral, Captain.
    I yield back, Mr. Chairman.
    Mr. Cummings. Mr. Oberstar.
    Mr. Oberstar. Thank you, Mr. Chairman, for holding this 
hearing on an extremely important subject matter that 
captivated the national attention. The underlying issues 
associated with this tragedy are also the subject matter of 
previous hearings of this Committee and action in reporting on 
our Coast Guard authorization bill. Had we been able to come to 
closure with the Senate in a conference on that legislation, 
perhaps we would be on the way to resolving some of these 
underlying problems of licensing and inspection and 
certification and supervision.
    In this case, the towing vessel operator was not properly 
licensed, was not authorized to operate a towing vessel without 
a licensed master in the wheelhouse, and without that 
supervision tragedy occurred.
    The Coast Guard has 100 notices of proposed rulemaking 
backlogged, in various stages of consideration, and the ones on 
towing vessels have been in the works for four years, in some 
cases. What is the problem? Is it a lack of personnel to 
process? Is it a lack of funding to carry forward with the 
rulemaking process? Are there glitches in the rulemaking 
process that have slowed this down? You have got over 5,000 
towing vessels to inspect, at the same time putting a drain on 
the personnel resources of the Coast Guard. Our legislation 
would provide a significant increase in staffing standards for 
the Coast Guard, so that is not the Coast Guard's problem, it 
is our congressional problem, the Senate's problem. If we can't 
resolve that matter in this Congress, it will be one of the 
very first issues we do in the next Congress, but something we 
just need to do.
    Then the particular case here, the complexity of the 
operating circumstances, the several levels of chartering, 
bareboat charter, this and that, wet lease, dry lease. I make a 
comparison with aviation. When an airline contracts out its 
maintenance, the FAA regulations require that that 
maintenance--say, if it is Northwest Airlines contracting out 
to United Airlines or to a third party MRO supplier, that 
maintenance provider must conduct the work according to the 
airline's--in the examine case it would be Northwest's--
maintenance manual, performed exactly to the standards imposed. 
And Northwest, in the end, is responsible for whatever 
shortcomings or failures of the maintenance provider. What are 
the rules in maritime, when craft are chartered out in the 
manner of this very complex case?
    Admiral Watson. Sir, the rules for maritime is if there is 
a bareboat charter, only the vessel is transferred and the new 
company, the company receiving that vessel is responsible for 
manning and operating and maintaining the vessel in accordance 
with whatever the contract requirements are. In a case like 
this, typically there is an on-charter and then an off-charter 
survey that is done to assure the two companies that there 
weren't any damages and that sort of thing. The Coast Guard 
would hold the operator of the vessel responsible for all of 
the requirements of the Code of Federal Regulations.
    Mr. Oberstar. So in that situation, then, the owner of the 
vessel is ultimately responsible for any failure that occurred, 
as example in this case?
    Admiral Watson. Well, in this case, the vessel was owned by 
ACL and it was being operated by DRD. DRD, as the operator, is 
going to be responsible for the master and all of the systems 
that are required to be on that vessel.
    Mr. Oberstar. So ACL--and I have witnessed the legal 
maneuvering--is attempting to divest itself of any 
responsibility for DRD, is that correct, under the Oil Spill 
Liability Act and under existing Coast Guard regulations?
    Admiral Watson. Well, there are really two different 
systems going on here. Under the Oil Pollution Act of 1990, ACL 
is still the responsible party. But under the 46 C.F.R. rules 
for safe operation of a vessel, DRD is responsible because they 
are the operator.
    Mr. Oberstar. So if you are a shipper, how do you know who 
is going to be responsible for your product on board a vessel? 
How can you assure that your goods are going to be delivered 
safely to the marketplace and who are you going to hold 
responsible? And you, as the Coast Guard, how can you enforce 
such under such conflicting circumstances?
    Admiral Watson. Well, the Coast Guard has been doing this 
for many years. We don't really have a problem determining who 
is responsible for the vessel and its safe operation. 
Similarly, when the oil is in the water, OPA 90 has made that 
very simple for us to determine who is going to be responsible 
for cleaning up that oil, and that seems to be working pretty 
well. For the owner's cargo----
    Mr. Oberstar. So in the circumstance of the New Orleans 
spill, ACL should then be responsible for DRD not having a 
properly licensed operator in the wheelhouse, correct?
    Admiral Watson. Yes, sir. What we have found since OPA 90 
is that this situation has caused cargo owners and vessel 
charterers to have systems called vetting systems, where they 
have inspectors that work for their company or their 
association that very carefully vet these operators, and quite 
often they will change their mind before they enter into a 
business agreement based on these vetting inspections. That is 
pretty much the norm in the larger tanker industry these days.
    Mr. Oberstar. Well, we have in our possession--the reason I 
am pursuing all this is we have in our possession a letter from 
American Commercial Lines (ACL) to the Director of National 
Pollution Fund Center. It says ``Please be advised that the 
sinking of the barge 932 and any pollution which may have 
occurred as a result thereof occurred as a result of the sole 
act or omission and fault of one or more third parties for whom 
ACL is neither responsible nor liable so ACL denies your 
designation of it, ACL, as the responsible party.'' How can 
they do that? How can they wash their hands of this?
    Admiral Watson. I can't comment on what the outcome of that 
request to the National Pollution Fund Center is going to be, I 
don't know how they will handle that letter, sir.
    Mr. Oberstar. I am getting at there shouldn't be an escape 
hatch for these operators; they should be responsible for the 
entity to whom they charter. Right?
    Admiral Watson. Sir, that would go a little beyond my 
knowledge of the details of OPA 90, sir.
    Mr. Taylor. Mr. Chairman, would you yield?
    Mr. Oberstar. I yield to the gentleman.
    Mr. Taylor. Thank you very much, Mr. Chairman.
    Admiral, I understand that, at the end of the day, a court 
will make this determination. I think what the Chairman is 
asking you, though, is since you are representing the Coast 
Guard today, what is the Coast Guard's interpretation of this 
law. After all, you have to have a basic understanding of the 
law to enforce it. So how does the Coast Guard view this, 
keeping in mind that, at the end of the day, a judge is going 
to make the final call?
    Mr. Oberstar. I thank the gentleman for reframing my 
question. You did it very well.
    Admiral Watson. Our interpretation is ACL is the 
responsible party. We held them responsible, in accordance with 
OPA 90, to clean up all the oil, and there was no question as 
to their responsibility to do that. If they had refused, we 
would have opened the Fund wide open and done the cleanup 
ourselves, and they would have had to deal with potentially 
three times the cost of that spill. That is what OPA 90 says.
    How this gets sorted out, another defense to liability is 
an act of God. There are always people that are faced with big 
cleanup costs that are going to try to find ways to reduce that 
liability, and we don't worry about that at this stage in the 
game, sir.
    Mr. Oberstar. But this industry is attempting to police 
itself and working diligently at it, and there are bad actors 
in a great many sectors of our economy, and I know of at least 
one, maybe two--maybe three, now that I think it--notices sent 
out by vessel operators that they will not charter to--first, 
one says we will not charter out. Your goods are shipped on our 
lines and we are going to be responsible for them, we are not 
going to contract out. Others have said we will subcontract 
only where we have a certificated operator that the master in 
the wheelhouse is qualified, is licensed, is certified, and we 
will take responsibility for that.
    But maybe we need to reinforce what the industry or some 
elements of the industry are attempting to do with change in 
the law, strengthen that responsibility so that we have 
something more in line with what I described in the aviation 
sector. Do you see any impediment to that?
    Admiral Watson. I don't see any impediment, sir.
    Mr. Oberstar. Thank you. How is it possible that a master 
could be away from a towing vessel for such an extended period 
of time without the firm who is responsible for operation of 
the vessel knowing the situation and making a good faith effort 
to manage its vessels? How can that be? What can be done in the 
ordinary course of operation to assure that the master of the 
vessel is not abandoning his post?
    Admiral Watson. Well, the purpose of our formal Board of 
Investigation is to ask that same question and get an answer to 
it. I am sure that, once they have an answer, they will provide 
a conclusion and a recommendation, and we will try to act on 
that up in the policy-making section of Coast Guard 
Headquarters. I don't have anything in mind to answer your 
question right now, sir. It is going to be a challenge for us 
to have that kind of visibility of the inner workings of any 
particular company.
    Mr. Oberstar. I have held for many years the principle that 
safety begins in the corporate boardroom, it doesn't begin in 
the Coast Guard or the FAA or the Federal Railroad 
Administration or the National Transportation Safety Board. 
Those agencies are there to protect the public interest, and 
when the private sector fails in its responsibility, that is, 
to live up to its own standards, or fails to measure up to the 
standards set by government safety agencies, then the 
government has to take action. Perhaps we have to await your 
board of inquiry to understand more about the complexities of 
this situation, but in these complex chartering arrangements, 
it occurs to me that we need to strengthen Coast Guard law and 
have cleaner, straighter lines of authority and oversight of 
these operations.
    Perhaps you can come back and answer my earlier question 
about the number of rulemakings that are in the pipeline and 
when you think you will be able to proceed on those.
    Admiral Watson. Sir, I promised Chairman Cummings that we 
will have the Notice of Proposed Rulemaking out for towing 
vessel safety regs in 2009.
    Mr. Oberstar. When?
    Admiral Watson. Before the end of the year, sir, but I am 
shooting for the spring.
    Mr. Oberstar. Spring is a long time. Before the shipping 
season?
    Admiral Watson. Yes, sir.
    Mr. Oberstar. All right.
    Mr. Chairman, I will withhold. I have other questions. I 
have to attend to another transportation meeting and I will 
return to the hearing.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Ms. Richardson.
    Ms. Richardson. Yes, thank you, Mr. Chairman.
    Did I understand you correctly to say that the towing 
vessels are only inspected approximately every three years or 
every five years? Which one is it?
    Admiral Watson. The Authorization Act of 2004 established a 
five-year Coast Guard presence inspection. These vessels are 
not actually inspected yet because we haven't promulgated the 
regulations.
    Ms. Richardson. Do you think that is sufficient?
    Admiral Watson. In combination with the safe management 
system and third-party inspections, I believe this will be the 
right mechanism to ensure safety on towing vessels.
    Ms. Richardson. If that is the case, why is it that the 
American Waterways--which it is my understanding is a trade 
association of towing vessels, tugboats, and barge industry--
that according to the AWO, DRD Towing underwent its last audit 
on or about May 17, 2008. DRD failed the audit because it did 
not have adequate documents to prove ongoing compliance with 
the requirements of the responsible carrier program. Although 
AWO indicates that the auditor that assessed DRD found that the 
firm met the required policies and procedures in place at the 
time of the audit, they still were inadequate in some of the 
other areas. Finally, it says DRD failed to provide the 
additional information and its membership in AWO was 
terminated.
    To what degree do you work with AWO?
    Admiral Watson. We have a partnership with the American 
Waterways Operators; we have been working with them for many, 
many years. They were our original partnership and that led to 
the establishment of the Responsible Carriers Program.
    Ms. Richardson. So if AWO, back on May 17th, found that 
they failed the audit, did you have any process in place to 
work with your partners to then follow up and see what was 
happening, especially since this accident happened less than 90 
days later?
    Admiral Watson. No.
    Ms. Richardson. Okay, what are you going to do to do that?
    Admiral Watson. We have been in discussions since this Mel 
Oliver case on the 23rd of July, and we hope to use information 
flow from the RCP program, potentially, in our targeting 
efforts to do law enforcement.
    Ms. Richardson. Okay, potentially or we are? Because, 
according to my notes, a civil fine that could be applied in 
this case of $25,000 for a violation, it cost the local 
economy--which Mr. Taylor represents, $275 million per day. So 
are we potentially or are we going to do? Because this is 
costing us a lot here.
    Admiral Watson. I understand. The information from 
Responsible Carriers Program is owned by the American Waterways 
Operators and the companies involved there. That would be up to 
those companies and the American Waterways Operators 
association to share that information with the Coast Guard.
    Ms. Richardson. Okay, but you just said to me that they 
were one of your originating partners. So if they are one of 
your originating partners, do you have the full intention of 
sitting down with them and maybe establishing a process where 
you can share information so we can avoid situations like this?
    Admiral Watson. Yes.
    Ms. Richardson. Okay. My second question is there were 85 
violations of having unlicensed operators. Are there any 
companies that had more than one, such as DRD?
    Admiral Watson. I will have to get back to you on that one. 
I don't know.
    [Information follows:]

    [GRAPHIC] [TIFF OMITTED] T5023.025
    
    Ms. Richardson. And getting back to what some of my 
colleagues asked, have you thought about having a zero 
tolerance policy? In California, where I represent, if a kid 
brings a knife or a gun to school, and if they do that once, it 
is called zero tolerance. It means, if you do it once, you 
don't come back to that school again.
    Have you thought about having a zero tolerance policy that 
if a company, given the severity of what we are talking about, 
$275 million a day that it is costing us? Some of the questions 
you have heard from my colleagues is, is the process 
sufficient; should the laws be changed. Mr. LaTourette said 
should a person go to jail, which I think that they should.
    So what recommendations have you put in place for this 
Committee or for the appropriate body to implement some sort of 
zero tolerance or some other policy that would avoid this 
situation from happening in the future?
    Admiral Watson. We don't have that recommendation to offer 
at this point. Our process would start with the marine casualty 
investigation itself, which would determine the facts, and the 
investigating team would make conclusions and then they 
typically would offer recommendations, which may include such a 
recommendation, which we will then act on.
    Ms. Richardson. My time has now expired. Are you willing to 
work with this Committee to give us recommendations or advise 
us on how we could implement stronger punishment, I guess is 
the way to put it? Mr. LaTourette suggested, potentially, if a 
person is driving a vehicle. In my opinion, how is this any 
different than if a person is driving a car, they do a DUI and 
they kill somebody? This is killing our environment. We need 
your recommendations in conjunction with this Committee so we 
can implement something that will really, in fact, deter 
companies from having someone drive a vessel and cause this 
type of damage.
    Admiral Watson. Yes, absolutely. We work with this 
Committee. I think we have a long history of sharing these 
recommendations with the Committee, as well as NTSB providing 
recommendations, and we would hope that the Committee would 
continue to work with us on these recommendations where it is 
appropriate for the Committee to act.
    Ms. Richardson. Thank you, Mr. Chairman, for giving me 
another 10 seconds.
    I heard Mr. LaTourette ask very specifically the question 
about are the violations or the punishment, or whatever is in 
place, is it sufficient; how do we need to change it, etc. Are 
you prepared to come back and give this Committee specific 
examples of recommendations of what we could do, either us 
recommending to another body or us doing through legislation? 
Are you prepared to assist us with giving us those 
recommendations, yes or no?
    Admiral Watson. Yes.
    Ms. Richardson. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Cummings. Just two quick questions. As part of the 
inspection process, the Coast Guard will be required to set 
manning levels for inspected vessels. Currently, on voyages 
lasting longer than 12 hours, a towing vessel must have two 
licensed individuals onboard, is that correct?
    Admiral Watson. Yes, sir.
    Mr. Cummings. However, neither individual is allowed to 
work more than 12 hours, is that correct?
    Admiral Watson. Yes, sir.
    Mr. Cummings. So if they work any overlapping time, one is 
violating the law, is that not the case?
    Admiral Watson. Yes, sir.
    Mr. Cummings. Okay. Is that an ideal working situation, do 
you think, Rear Admiral?
    Admiral Watson. Well, that has been a topic that we have 
been looking at since 2004. We have done some pilot programs. 
We are going to address that in the proposed rulemaking in 
response to the authorization that requires us to look at watch 
standing and service time on board a vessel. There are a lot of 
different factors involved with the ultimate safety question, 
and I can't speculate as to what the conclusion is going to be 
as far as what is going to be in the regulations on that, sir.
    Mr. Cummings. Additionally, if a boat is in 24 hour 
operation, at least one of the licensed individuals must be on 
watch at all times in the wheelhouse, is that correct?
    Admiral Watson. Yes.
    Mr. Cummings. And neither can work more than 12 hours, is 
that correct?
    Admiral Watson. That is correct.
    Mr. Cummings. Are there any other duties that either 
licensed individual would have to attend to besides piloting 
the vessel?
    Admiral Watson. Well, they would typically have some 
administrative duties, and quite often those duties can be done 
in the pilot house.
    Mr. Cummings. If so, how can either individual attend to 
them without either leaving the wheelhouse or violating the 12 
hour rule? Based on what you just said.
    Admiral Watson. Well, we know that some administrative 
duties can be done during the 12 hour watch, so that when they 
are finished that watch, there are no other duties that need to 
be done. But we are continuing to look at that and we need to 
provide some guidance, I think, through our regulatory process 
on how to keep this violation of the law from occurring.
    Mr. Cummings. As I was listening to Mr. Taylor's questions 
and Ms. Richardson's and Mr. LaTourette's, I thought about the 
many discussions that I have had with the Coast Guard with 
regard to drug seizures, and I asked the question, well, how do 
these guys--they purchase these boats, the ones that they 
operate under the water and they do all kinds of things to get 
around the Coast Guard, and one of the things that has been 
said to me over and over again by the Coast Guard--and, by the 
way, the Coast Guard has done a great job with regard to drug 
seizures. I understand we just had a major seizure just 
recently. Congratulations on that.
    But they said, well, these guys look at this as a tax. In 
other words, they realize that they are going to try to get as 
much drugs in the United States as they can, and they know, if 
you are going to get caught and they are going to spend this 
money, but it is part of doing business.
    As I listened to the questions, I am wondering whether 
there are some folks that go out there saying, what the hell, 
this is just part of the process. If we get caught, we get 
caught, no big deal. And I hate to say that, but when you think 
about it, the fact that you put somebody out there in the water 
who is not properly licensed--and I am going back to what Mr. 
LaTourette was talking about with regard to these prison 
sentences--you have to really wonder what they are thinking. 
They must see some advantage--now going to Mr. Taylor's 
question--some advantage to doing things the wrong way.
    Then I look at a situation like ballast water. With ballast 
water, we have got almost the entire industry, everybody, 
everybody saying we need to do something about this because we 
are all concerned about our waterways; we are concerned about 
these species invading our waterways. But I don't necessarily 
feel the same kind of enthusiasm about this kind of thing, 
which is just, to me, as significant, and I am just wondering, 
as we close out, because it sounds like there has been a call 
for some stricter rules, some stricter enforcement. I just want 
to know your opinion of all this, what your feelings are.
    Admiral Watson. First of all, I believe we are dealing with 
professionals here, and my approach is to start with using that 
appeal to our advantage. People have to go through a lot of 
study and effort, and they are going to sea, really, in the 
service of all the rest of us to provide this means of 
transportation. They should be paid well for that and they 
should feel that it is just not worth it to take a shortcut, 
because they would lose their future earnings and they would be 
losing profession.
    I think that is the answer to this. We have to hold these 
mariners to a high standard and we have to show them a lot of 
respect for what they do, and we have to encourage the 
companies to show that similar respect and support their needs 
when they are doing their duty as professional mariners.
    Mr. Cummings. Now, in fairness, in fairness, I must say 
that, in my discussions with Mr. Allegretti of AWO, I get the 
impression that we may just have a few bad apples and a whole 
bunch of people who are really trying to do it right. But, at 
the same time, the few bad apples can cause millions of dollars 
worth of damage and can tarnish the reputation of the folks 
that Mr. Allegretti deals with on a daily basis who are trying 
to do it right.
    It is interesting that AWO did an audit and these folks 
failed the audit. Interesting. Then the question becomes when 
they go to a professional organization and fail the audit, and 
they are still out there, then it seems to be some kind of gap 
that we need to close, because the professionals--the kind of 
people that you just talked about--who have earned this great 
reputation, this is what they do every day. They give it their 
best. They want to see everything go right. They don't want 
people out there on the water that are failing to do what they 
are supposed to do.
    So they set up the mechanisms to check these folks out, 
they fail, but they are not an enforcement agency. So then the 
Coast Guard comes in and says we have got to--I think if there 
are holes, we have got to fill those holes. Do you follow me?
    Admiral Watson. Yes, sir. I think the two ways to fill the 
holes is perhaps some more information sharing between the 
industry and the Coast Guard when there is indications that 
there are weaknesses there through the processes that they have 
in place and then, secondarily, getting these rules out, 
turning these vessels into inspected, certificated vessels, 
where we will have much more of a presence.
    Mr. Cummings. Thank you.
    Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman. I will try to be 
brief.
    Captain Stroh, I found, I think, in the code the fines that 
you were talking about. I will just ask you if you have an 
opinion, either you or the Admiral. Title 46, Section 2302, 
subparagraph (b) indicates that a person operating a vessel in 
a grossly negligent manner--that then goes on to do other 
things--commits a Class A misdemeanor, for which I assume you 
can go to jail. Does the service have an opinion as to whether 
or not operating a vessel without a license meets the threshold 
of gross negligence? That act alone.
    Captain Stroh. Well, my comments would follow Admiral 
Watson's comments, that part of the investigation, if the 
investigation shows that there was perhaps some gross 
negligence, then that recommendation would go to Admiral 
Whitehead and he could act on it.
    Mr. LaTourette. No, I got that. I think my question is more 
specific than that. Gross negligence means you are drunk, you 
are driving the boat and not paying any attention. But if all 
the evidence is that this person operated the boat when he 
wasn't supposed to because he didn't have the proper license, 
do you have an opinion as to whether or not that rises to the 
level of gross negligence?
    Captain Stroh. I care not to share that opinion until 
policy comes out that helps clarify that.
    Mr. LaTourette. All right, I got you.
    Mr. Chairman, just on that, as we are always looking for 
things to do, I would maybe ask that we consider an amendment 
to Title 46, Section 2302, subparagraph (b) to indicate in 
there that operating without a license is in fact gross 
negligence. And to go to Mr. Oberstar, the Chairman's point, 
because sometimes you are going to find a mariner who has been 
forced to do it. He says, I am not doing it, I don't have a 
license. Okay, you like your job? You drive the boat. That the 
Chairman considers language that says a person operating a boat 
without a license is considered to be grossly negligent, and a 
person authorizing or ordering the person as well. A Class A 
misdemeanor, I think, is six months in jail, maybe $1,000 fine.
    My personal view is to prevent--if this is the proximate 
cause of this collision, that you had a guy not knowing what he 
was doing and he wasn't properly licensed, I think six months 
in jail for he and the person that ordered him to do it is not 
an unreasonable penalty.
    But, anyway, I would ask you to consider that and thank you 
for the time, and I yield back my time.
    Mr. Cummings. First of all, I don't think what you just 
said--I have to look at it a little more carefully, but I don't 
think that is unreasonable. As I said from the very beginning, 
we have to figure out how--we can't just make excuses, we have 
to try to address these issues as best we can. At the same 
time, you and I have had many discussions about overkill, and I 
don't think that this is overkill, by the way. I just think 
that we have got to look at these matters very carefully and 
try to figure out, okay, does this work. Based upon everything 
that is on my mind right now, I am in total agreement with you.
    I think we have got to also look at the master who leaves 
the boat. We might want to take a look at that, too.
    And I would urge the witnesses who are going to be coming 
up next to comment on what Mr. LaTourette has said. You may 
have your own opinions on that and we would love to hear what 
they might be.
    If any of you all have an opinion on what he just said, we 
welcome what you might want to say. I am not asking you to, 
but, if you do, we would like to hear it.
    Admiral Watson. Sir, harping back to my point about the 
profession, you know, attorneys are professionals, doctors are 
professionals, and somewhere you have got to find the line 
between the system that holds the person accountable for their 
profession and the criminal justice system. I think you want to 
be very careful and deliberate if you choose to move that line 
and the signal that that might send. I am an advocate of doing 
things that will enhance the profession, because I think that 
that is a good thing for all of us in the maritime community.
    But under certain circumstances--and we already have a line 
there: if a person is drunk, if they are taking drugs, even 
there is criminality in killing wildlife with oil that you 
spill when you have an accident. So there are plenty of 
statutes for finding people in violation that causes them to 
serve in violation of a crime.
    I think we have one for extremely gross negligence, and we 
ought to just take a real close look at the existing law before 
we make changes.
    Mr. LaTourette. Would the Chairman yield to me?
    Mr. Cummings. I will yield.
    Mr. LaTourette. Thank you.
    Admiral, I agree with you, I don't think we should make up 
new crimes. Before this job I was a county prosecuting 
attorney, and in Ohio it is against the law to drive drunk, it 
is against the law to drive with a suspended license, and it is 
against the law to drive without a license, and you go to jail 
for it.
    It is not putting somebody in a stock. It is not putting 
them in prison for years and years and years. We are talking 
about a slight deterrent of maybe six months and a $1,000 fine 
to keep them from spilling 300,000 gallons of oil when maybe, 
mercifully, in my mind, there shouldn't be a difference between 
the guy that kills a duck with oil and the guy that doesn't 
kill a duck with oil. I mean, if the oil is spilled, it 
shouldn't be dependent upon where that oil went as to whether 
or not this person goes to jail.
    I thank the Chairman.
    Mr. Cummings. I would think, too, that a judge would have 
certain discretion if there are some mitigating circumstances. 
But I have got to tell you that I agree with Mr. LaTourette.
    In my other life, I used to represent lawyers who got in 
trouble, and he could be the greatest lawyer in the world, but 
if he went out there and really screwed up and did something 
that was really, really bad, he had a problem.
    I would think that the industry--and the reason why I drew 
the comparison with the way the industry deals with ballast 
water is because I get the impression that everybody thinks 
that this is the thing that is best for the industry. If 
somebody goes out there who is not licensed, the question, 
first of all, becomes if we are going to have a licensing 
process, why have it if people are just going to be able to go 
out there without a license and do their thing? There is a 
purpose for that licensing process, and the purpose is to make 
sure that folks who get out on our waterways are operating 
vessels safely and are not putting others in danger, and in 
this case not polluting our waterways. I could go on and on.
    So it just seems to me that this is not an unreasonable 
solution to a problem. Again, I think we have to be very 
careful, but we don't want to have these holes, these gaps. 
Obviously, there are some bad apples in this bunch that see the 
gap, and they are going through it, I mean, big time. One of 
the things that I say to my staff when I see an error in a memo 
or whatever, you know what I say to them? I say, look, I see 
this error. And they say, well, gee, Congressman, you shouldn't 
be upset with us about just one error. I say, what I worry 
about is what I don't see. That is what I worry about.
    So what I am saying to you is there is probably a lot going 
on that we don't even know about, but certainly Mr. 
LaTourette's suggestion, putting it out there that, look, if 
you want to play that kind of game, well, then, this is what 
you may face. And I would think that others out on our 
waterways would want the same kinds of things.
    Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman.
    Captain Stroh, I have some small idea of your huge 
responsibilities, and I do appreciate those huge 
responsibilities. All of us very much appreciate the phenomenal 
job the Coast Guard after Katrina, just remarkable. But I want 
to get to a conversation I had, interestingly, over a weekend. 
A guy who sells electronically controlled valves to the oil 
patch was ribbing me that he has to have a TWIC card. So here 
is a guy who probably will never go out on the water, but does 
go to waterfront facilities, has to get a TWIC card, and it 
didn't bother him much because his employer paid for it.
    But, on the flip side, we have got people who are pushing 
barges full of fuel through a body of water that regularly has 
tankers with benzene, styrene, some of the most dangerous 
chemicals around that, if they were to rupture these tanks, 
would kill hundreds, if not thousands, of people that live near 
the water or might be on a cruise ship that is tied up at the 
river. So this accident really did have the potential to have 
killed hundreds, if not thousands, of people under a slightly 
different scenario. And I am not trying to be alarmist about 
this, I am just visualizing what could have happened.
    The Coast Guard is, again, enforcing TWIC laws. The Coast 
Guard is out there enforcing fisheries. The Coast Guard is 
enforcing a lot of things. When you tell me, though, that you 
are only conducting one patrol of Port New Orleans once a week, 
I have got to tell you that someone out there says I have a 
very small chance of getting caught with an unlicensed 
operator. My constituents instinctively know where the speed 
traps are and instinctively start slowing down when they get 
close to them. It is just human nature.
    But if someone is only going to see a boat out there once a 
week, they know that I can get by with paying less money to an 
unlicensed operator, and I have got a very small chance of 
getting caught. In fact, if this accident hadn't have happened, 
this guy wouldn't have been caught.
    So the question is does that come down to a question of 
resources? Has Congress or the Administration--it could be 
either or both of us--given you too many responsibilities and 
have you tried to do too many things with your limited funds? I 
do know that that is a degradation. There used to be a daytime 
patrol and there used to be a nighttime patrol, and they would 
intentionally move the hours around so that those high 
visibility patrols, people didn't know when they were coming. 
So how does this happen, Captain, and, above all, how do we 
correct this?
    Captain Stroh. Sir, I probably wasn't as clear as I should 
have been. My answer was in response to your question about 
downtown New Orleans, the central business district. In my AOR, 
we probably have patrols done daily in the lower part of the 
river, in the upper part of the river. So resources is not the 
issue; we have plenty of money for gas. At minimum, we are 
downtown in the central business district weekly, but we have 
vessels out everyday in a different part of my AOR doing the 
good work. So I am sorry if I misled you on that.
    To reiterate, we have plenty of boats, plenty of resources.
    Mr. Taylor. Captain, if I may. You didn't get to be a 
captain--you got there because you are a smart man. Obviously, 
we have a problem. How would you address this problem? Because 
the things that jump out at me would be, number one, increase 
the fine, just like we did on the Oil Pollution Act of 1990, to 
make the offense so expensive that people will take the steps 
so that the offense doesn't happen. That is the way I looked at 
OPA 90 and I think it has worked.
    So do we increase the fines for people who knowingly have 
an unlicensed mariner out there? Do we change the requirements 
on the Certificate of Financial Responsibility and lower the 
tonnage of the vessel that has to have one and include the fact 
that they have to have a licensed operator on board? I am 
asking for your recommendations. We obviously have a problem. 
So what would your recommendation be to solve this problem, or 
would it just be more enforcement of existing laws?
    Captain Stroh. I think through the Marine Safety Plan that 
Admiral Watson is working on, it is going to bring more 
capacity to my unit, and that will be a very good increase and 
help to the situation at hand. Also, with the inspection towing 
vessels here in the near future, that will create a greater 
presence on that type of vessel. Those two are two big steps in 
the right direction
    Mr. Taylor. Should we increase the fines for violators?
    Captain Stroh. I do know----
    Mr. Taylor. Just roughly. I would hope that the gentleman 
from AMO will address this, American Waterways Operators. There 
has got to be a pretty good difference in the cost of paying a 
deck hand and a licensed operator. And if you can get by for a 
week or two with that savings, you have already covered the 
cost of that $2,000 fine, I have got to believe. So, is one way 
of addressing this--I am asking would there be any value to 
increasing the fine for someone who knowingly does this, or in 
something other than an emergency scenario?
    Captain Stroh. I see that as something we definitely need 
to look at. I know a lot of companies out there fear the 
lawsuits that come from an investigation more so than the civil 
penalties that come from our investigations.
    Mr. Taylor. Thank you, Mr. Chairman.
    Mr. Cummings. All right, I want to thank all of you for 
your testimony. We have a vote. We are going to recess for a 
short period to do a vote, and I expect we will be back here 
somewhere between quarter after and 12:30.
    Thank you.
    [Recess.]
    Mr. Cummings. We will now hear from Mr. Mario Munoz, who is 
the Vice President of Vessel Operations, with American 
Commercial Lines; Mr. Eric Dawicki, President of the Northeast 
Maritime Institute; Mr. Richard A. Block, Secretary of the 
National Mariner's Association; Mr. Augustin Tellez, Executive 
Vice President of the Seafarer's International Union; and Mr. 
Thomas A. Allegretti, President and CEO of the American 
Waterways Operators.
    They tell me we are going to have another vote soon. So 
that you all aren't here until tonight, you might, if you feel 
like there are some things that you don't need to say, don't 
say them. Use your own discretion. I am not trying to rush you, 
I am just trying to make sure. Because we keep having these 
breaks, and we will be here for a good while. I don't mind 
being here, but I am sure you have things to do.
    Mr. Munoz.

     TESTIMONY OF MARIO A. MUNOZ, VICE PRESIDENT OF VESSEL 
OPERATIONS, AMERICAN COMMERCIAL LINES; ERIC DAWICKI, PRESIDENT, 
  NORTHEAST MARITIME INSTITUTE; RICHARD A. BLOCK, SECRETARY, 
  NATIONAL MARINER'S ASSOCIATION; AUGUSTINE TELLEZ, EXECUTIVE 
   VICE PRESIDENT, SEAFARERS INTERNATIONAL UNION; THOMAS A. 
  ALLEGRETTI, PRESIDENT AND CEO, AMERICAN WATERWAYS OPERATORS

    Mr. Munoz. Good morning, Mr. Chairman and Members of the 
Committee. My name is Mario Munoz, and I am Vice President of 
Vessel Operations for American Commercial Lines. I served as 
one of the incident commanders during the New Orleans oil spill 
response.
    I am here today to talk about the events that transpired 
following the sinking of ACL's double-hulled tank barge in the 
early morning hours of July 23rd. I will also be making 
recommendations to enhance safety.
    First, I want to express my deep disappointment that oil 
was spilled into the Mississippi River. As a native of New 
Orleans, I understand south Louisiana's exceptional culture, 
our important wetlands and the vital contribution that our 
region makes to the Nation's economy. American Commercial Lines 
is one of the Nation's leading inland barge companies. One of 
ACL's core values is safety: never compromising the safety of 
our people, of the environment, of our property or equipment.
    In 2008, ACL was the first marine transportation company to 
be named as member of the EPA's National Environmental 
Performance Track Program. ACL also received the U.S. Coast 
Guard's William M. Benkert Marine Environmental Protection 
Award.
    Please let me describe the events of July 23rd. At 1:30 in 
the morning, an inland tow boat operated by DRD Towing was 
pushing an ACL tank barge when it collided with a tank ship in 
New Orleans. DRD is an independent contractor based in New 
Orleans that provided towing services for ACL and other 
competing barge lines. The tow boat that was involved in the 
New Orleans oil spill is named the Mel Oliver and is owned by 
ACL.
    On July 23rd, the Mel Oliver was operated and crewed by DRD 
Towing under a long-term bareboat and time charter contracts. 
DRD Towing was required to comply with all applicable Federal 
and State regulations. Consistent with the terms of the charter 
agreements, the Mel Oliver was under the custody and control of 
DRD Towing as the sole operator.
    Now let me turn to the first phase of our spill response. 
Within minutes of the event, ACL was notified that a collision 
had occurred involving one of our barges and that there was a 
potential spill. Rather than waiting for companies who were 
operating the vessels involved in the collision to step up, we 
put our oil spill response plan into action. Within minutes, 
ACL activated our local oil spill response organizations and 
directed them to engage a potentially major spill. Our approach 
to the response was to deploy all available resources as 
quickly and safely as possible.
    Although we initially did not know the extent to which our 
barge was damaged, we responded with a worst case scenario 
approach and planned for a total loss of the product, which was 
approximately 10,000 barrels of No. 6 fuel oil. Following the 
prioritized objectives laid out by our incident command staff, 
containment booms had been placed on the municipal water 
intakes and near the damaged barge. Human safety was our number 
one priority. From July 24th, ACL initiated continuous air 
monitoring that included over 2.5 million air samples. None of 
those samples ever showed any contamination at levels harmful 
to human health.
    Protecting wildlife was also a top priority for us. From 
the beginning, we worked with specialists from the Federal and 
State agencies who set out to observe oiled waterfowl and 
mammals. Thankfully, recorded wildlife deaths were kept low. 
Significant wildlife impacts were avoided by protective 
measures put in place early in the response.
    Within the first week, the unified command grew 
significantly. At its peak, we employed 2,300 personnel, 200 
response boats and deployed over 100 miles of boom. We cleaned 
over 100 deep draft ships and over 1,100 barges and boats. Due 
to the collision, the damaged tank barge had settled in the 
base of the Crescent City Connection Bridge. I have included an 
illustration of the barge and the salvage operation for your 
review. While dangerous and complex, the barge was successfully 
salvaged without any other significant incidents. The barge 
design allowed us to reclaim one-third of the oil that was 
thought to have been lost.
    As Chairman of the Towing Safety Advisory Committee, I have 
been directly involved in the development of both the Inland 
Towing Vessel Licensing Standards and Towing Vessel Inspection 
Standards. I am encouraged that the Coast Guard is close to 
publishing the notice of proposed rulemaking for the towing 
vessel inspection process. TSAC has recommended the new 
regulations include a strong emphasis on the safety management 
system. When a vessel's certificate of inspection is coupled 
with a measured safety management system, the combination will 
provide the Coast Guard with a solid enforcement tool that ties 
a vessel's human factors directly to a company's ability to 
engage in commerce.
    ACL also supports a program of targeted enforcement from 
the Coast Guard. Current laws must be adhered to. ACL is also 
working with AWO to improve the Responsible Carrier Program. We 
need to make the results of RCP audits immediately available to 
trade association members and the Coast Guard alike.
    I would like to once again recognize the Coast Guard, NOAA 
and State officials, especially Captain Lincoln Stroh, for his 
leadership in the Unified Command. I also want to thank this 
Committee for the opportunity to testify, and I am available 
for any questions. Thank you.
    Mr. Cummings. Thank you very much.
    Mr. Dawicki.
    Mr. Dawicki. Thank you very much, Mr. Chairman and Members 
of the Subcommittee. Thank you for calling this hearing and 
thank you for the opportunity to testify this morning.
    I am Eric Dawicki, President of Northeast Maritime 
Institute, located in Fairhaven, Massachusetts. NMI is one of 
the largest privately-held maritime education and training 
institutions in the United States and has trained approximately 
35,000 mariners over the Institute's 27 years of operation.
    I am a fourth generation mariner, having started my career 
aboard fishing vessels and inland passenger ferries and as part 
of the United States Coast Guard Reserve. I later served on 
board LNG and dangerous liquid tankers. I also served as part 
of the management team for LNG tankers.
    In addition to my present position as President of 
Northeast Maritime Institute, I am also the President and CEO 
for the Commonwealth of Dominica Maritime Registry, a company 
responsible for the management of the Commonwealth of Dominica 
Maritime Administration's 400 vessel fleet.
    First, let me state up front that I understand that my 
testimony this morning might be construed as controversial, 
however, it seems that the greater interest of serving my 
Country through testimony is an imperative. It is not only a 
duty, as directed, but it is sincerely an honor to appear 
before you today to impart my views on the case and effects of 
the recent economic, environmental and operational crisis 
caused by the oil spill on the Mississippi River.
    In light of my experience and exposure to the inland and 
western river trades, I am compelled to testify that this 
segment of the Nation's maritime industry is severely flawed. 
Everyone sitting here today has a significant stake in the oil 
spill that occurred on the Mississippi River last July 23rd. 
But let me be clear: we are all responsible for ensuring that 
we as a Nation have in place the sound foundational, 
operational and technological capability to prevent tragedies 
like this oil spill from ever happening again in the United 
States.
    The captain who left the vessel under the command of a non-
licensed mariner, the non-licensed mariner who agreed to take 
the vessel across the river, the company that operated the tow 
boat, the charterer that hired the company, the United States 
Coast Guard, Congress, the President and I appearing before you 
this morning must enlist your support. We are all accountable 
for the safety and preservation of life, property and 
environment in this great Nation's waterways.
    The maritime safety program in the United States is in 
urgent need of restructuring and a more solid focus on its 
mission and its operations is essential. While the mariners, 
the shipping company, the charterers, the Coast Guard, can be 
picked apart at every level, I believe that it will take a 
courageous stand by this very body to initiate a solid set of 
standards that this industry and the rest of the Nation's 
maritime industry comply with. There is no scapegoat here. 
There is simply a systemic flaw in the governance of the 
maritime industry, from mariner licensing and work hour rules 
to appropriate watch standing principles, quality management 
systems, business management practices and enforcement of 
regulations all play a role in this failing system.
    Our maritime industry is fractured on almost every level. 
It will take strong leadership by this Subcommittee and this 
Congress to independently investigate the systemic pitfalls as 
well as the strengths of the current system, to put in place 
enhanced performance and to redevelop this industry to be 
revenue generating. This industry can once again become an 
industry of excellence.
    The economic impact of this very spill alone is predicted 
to be hundreds of millions of dollars per day. I state that as 
a property owner that has been affected by an oil spill on 
Buzzards Bay. The failure to prevent the spills continues to 
have negative impacts on my community many years later. I would 
suggest that a comprehensive economic impact statement might 
indicate that the negative impacts exceed three times the 
current estimates. I strongly believe that 80 percent of all 
maritime casualties can be avoided. I am convinced that there 
are absolutely no excuses for human error when managing the 
safe operation of a vessel. Unfortunately, our system, without 
stronger legislative and regulatory sanctions, enables excuses 
and exercises either special treatment or lackadaisical 
attitudes toward this very industry. More can and must be done.
    Thank you. I am pleased to answer any questions you might 
have.
    Mr. Cummings. Thank you very much.
    Mr. Block?
    Mr. Block. Mr. Chairman, Members of the House Coast Guard 
and Maritime Transportation Subcommittee, I appreciate the 
opportunity to speak here today.
    I am the Secretary of the National Mariners Association and 
speak on behalf of approximately 126,000 lower-level mariners 
who work on tugs, tow boats, offshore supply vessels and small 
passenger vessels of less than 1,600 gross tons. Lower-level 
mariners comprise a clear majority of all American merchant 
mariners.
    There are a number of problems that need to be resolved. We 
have new licensing regulations that went into effect in a very 
leisurely manner between May 21st of 2001 and May 21st of 2006. 
An entirely new apprentice mate/steersman position was added. I 
worked on the TSAC committee that prepared much of this 
material. We left it in the hands of the Coast Guard. 
Unfortunately, the word never really got out on what apprentice 
mate/steersman was all about and how to transition from one 
license to another.
    The Coast Guard continues to have difficulties in licensing 
and unfortunately, driving many people away from the industry. 
Unfortunately, it has taken a $275 million accident to raise 
public attention here. In the past dozen years, there have been 
a number of other accidents, Bayou Canot, the Queen Isabella 
Causeway accident, Webers Falls, the Rhode Island oil spill, 
San Juan oil spill, Buzzards Bay oil spill. I find myself in 
agreement with an article that appears in the Waterways 
Journal, that a new inspection regime might have prevented this 
spill, might have prevented it.
    Where are these new regulations? We have been sitting, 
waiting for these for four years. Why is a towing vessel so 
different from a small passenger vessel? There are many, many 
similarities. Why can't the regulations from one set of vessels 
apply to another? It seems to me that this entire rulemaking 
process is taking entirely too long.
    The licensing figures that Admiral Watson had mentioned 
this morning, they were all in the single digits. 
Unfortunately, I hear about people running vessels without the 
proper license every day. Where is the Coast Guard? Why can't 
they hear this? We have reported many such incidents to the 
Coast Guard. The problem appears to be Coast Guard 
investigations. But this matter has already been covered in 
another hearing. There was an excellent report done by the 
Department of Homeland Security. We contributed approximately 
13 volumes of material to that report. The DHS paid very close 
attention to us. And I am very satisfied with their report.
    I think that Coast Guard investigations is a very serious 
problem in the marine safety system. It is not a new problem. 
It has been around since 1994. The Coast Guard themselves did a 
report on it in 1996. There are problems with Coast Guard 
inspections. There is a very serious problem with the entire 
marine safety system. We have written a number of reports on 
this, we have sent approximately 20 of them to Congress. A year 
ago, I presented a list of these reports. I believe in 
listening to the opening statements by Chairman Cummings that 
you have read these reports, that you understand what is going 
on here and that some action needs to be taken. I believe the 
action that you are planning in H.R. 2830 is exactly what is 
needed. I want to congratulate the Subcommittee and the entire 
Committee for putting this together. I think you have done the 
right thing.
    Thank you.
    Mr. Cummings. Thank you.
    What the Committee is going to do is hear from Mr. Tellez, 
then we will have approximately five minutes to get over to the 
vote. There is one vote--we are of the opinion there is one 
vote at this time. Then we will come right back. Mr. Tellez, 
then we will adjourn and come right back.
    Mr. Tellez. Thank you, Mr. Chairman.
    My name is Augie Tellez, Executive Vice President of the 
Seafarers International Union, which represents thousands of 
American merchant mariners employed in all the maritime 
sectors. Most of my statement has been eloquently stated by you 
and others on the Committee. Therefore I will just in the 
interest of time start skipping around.
    The one thing I will repeat is that the undeniable fact is 
that that vessel was operating without a qualified mariner in 
the wheelhouse and with no licensed master aboard. 
Unfortunately, it was also not the first time that this company 
performed this practice. As Ms. Richardson said, it was no 
secret that this company was a bad company, or better yet, an 
``irresponsible carrier.'' So it begs the question how was this 
company allowed to operate, why did a company as big as ACL 
charter it, knowing full well that it was an irresponsible 
carrier. To understand that, you have to understand how this 
industry evolved. Basically, the industry, no matter what the 
trade, fell into two categories. One was the regulated 
industry, which included and has all the protections and 
enforcement inherent in that name, and the other was the non-
regulated sector of the industry, which the tugboat in 
question, the Mel Oliver, fell under, at least until spring of 
2009, anyway.
    To their credit, the industry itself, with the associations 
such as AWO, developed self-policing and third party ordered 
systems to fill that gap. Those policies may very well work in 
a perfect world. But in the imperfect and real world, there are 
companies who will choose the short-term commercial and 
financial advantage over and above safety of the environment 
and life. And I might add, to the detriment of responsible 
carriers who do invest in the effort to provide safe marine 
transportation on the rivers.
    What was the immediate result of the company not abiding by 
the rules? As stated earlier, their membership was revoked. In 
other words, Mr. Chairman, they were thrown out of the club but 
they were allowed to still operate in the neighborhood. The 
company still operated in the inland marine environment, along 
with hundreds of others who do not belong to the program. The 
SIU does believe that the program does have merit and that most 
members have a sincere interest in providing safe and efficient 
transportation.
    However, a deep regulatory void exists, as you say, a 
regulatory gap. The U.S. Coast Guard is the Government agency 
responsible for promoting marine safety and protecting the 
environment on the inland waterways. In fact, recently in an 
article, a representative of AWO recently noted that only the 
Coast Guard can truly regulate the industry. We agree. 
Unfortunately, they have been unable to properly do it, for a 
host of reasons, one of which may be the lack of sufficient 
resources and funding.
    Self-policing works only when everything is going well, 
especially when there is no shortage of manpower and the 
economic conditions are favorable. Today, that is not the case. 
And many companies seek short-term answers, as evidenced by the 
recent accident and the practices that led to it. Now, because 
of the shortage of manpower in the industry, inland companies 
are looking to Congress and the Coast Guard to decrease the 
requirements for the apprentice mate/steersman to progress to 
mate/pilot.
    At this time, I would be remiss in not mentioning the SIU's 
school in Piney Point, Maryland. We work with our companies 
through the school to help ensure the company's vessels are 
crewed with properly trained and qualified people. The school 
has developed a total program for professional advancement, 
resulting in a highly-trained, up to date, competitive work 
force for the maritime industry. The latest five year Coast 
Guard marine safety performance plan has placed the towing 
industry under the heading of ``significant residual risks.'' 
The report notes that the environment in which the towing 
vessels operate makes this industry especially high risk.
    The SIU advances that the significant residual risk 
designation makes it abundantly clear that the U.S. Coast Guard 
must regulate all aspects of the tug and barge industry. Their 
marine safety program for towing vessels must include onsite 
towing vessel inspections, setting of safe manning levels, 
establishing training requirements, standards, et cetera.
    In conclusion, the SIU and maritime labor has a history of 
appearing before Congress affirming their commitment to safety 
in the maritime environment. On multiple occasions we have 
testified for and supported the initiation of merchant mariner 
documents for mariners on the inland waterways, attempting to 
demonstrate that such documents and their inherent requirements 
and protections indeed would improve safety in that sector. Now 
is the time for the Subcommittee to revisit this important 
issue.
    The SIU stands ready to assist the Subcommittee and the 
Coast Guard in promoting safety and environmental protection in 
the brownwater sector. As always, in closing, I urge all of you 
to visit us at Piney Point.
    Mr. Cummings. Thank you, Mr. Tellez.
    We stand in recess for the next 20 minutes. Thank you.
    [Recess.]
    Mr. Cummings. The Subcommittee will come to order.
    Mr. Allegretti.
    Mr. Allegretti. Thank you, Mr. Chairman, Members of the 
Subcommittee, for this opportunity to testify here today.
    The members of AWO share your disappointment and your 
frustration at the oil spill that gave rise to this hearing. We 
know that Congress and the public have zero tolerance for 
spills and rightly so.
    For the hundreds of AWO members who try hard to do the 
right thing every day, this accident is a painful reminder that 
we must do better. Zero spills is our goal, as it is yours.
    The spill that brings us here today, as has been said, 
occurred when the towboat Mel Oliver was under the individual 
control of a steersman who lacked the legal authority to 
operate the vessel, except under the direct supervision of a 
licensed master or pilot. Let me be clear: this is a violation 
of current law, Coast Guard regulation and the AWO Responsible 
Carrier Program. AWO will neither defend nor seek to explain 
away such conduct. It is inexcusable and it is not 
representative of the way our industry operates and the care we 
take to uphold the public trust.
    For the record, DRD Towing, the operator of the Mel Oliver, 
is no longer a member of AWO. The company's membership was 
terminated last month for failure to meet its obligations under 
the Responsible Carrier program.
    Mr. Chairman, accidents like the Mel Oliver spill are not 
the norm in our industry. The culture of mediocrity that you 
referenced that results in such incidents stands in stark 
contrast to the culture of safety and stewardship that AWO 
members have widely embraced. The members of AWO share your 
determination that accidents like this never happen again.
    I would like to highlight three recommendations for actions 
that Congress, the Coast Guard and the industry can take in 
support of this essential goal. First, AWO should and will 
develop a procedure to provide its member companies with 
immediate, real-time information when a company fails a 
Responsible Carrier Program audit. The RCP already requires AWO 
members to abide by vendor safety procedures for ensuring that 
vendors who provide towing and fleeting services to their 
vessels comply with high standards of safety.
    AWO will develop a means to provide immediate notification 
to all of our members when a company has failed an RCP audit. 
This will help our members exercise due diligence with respect 
to the safety of their vendors.
    Second, the Coast Guard should institute a targeted 
enforcement program that focuses on towing companies with 
marginal operating practices and poor safety records. As 
Chairman Oberstar has said many times, safety begins in the 
corporate board room. But when companies are unwilling to 
embrace their responsibility, Government must step in. This 
kind of risk-based enforcement scheme will make smart use of 
scarce Coast Guard resources to assure that current laws are 
enforced. Both the industry and the Coast Guard know that 
pockets of substandard operations still persist. These bad 
actors can be targeted without disrupting the operations of the 
vast majority of towing companies that operate safely and with 
respect for the law.
    Third, the Coast Guard should publish a notice of proposed 
rulemaking by the end of this year to implement Congress' 2004 
Towing Vessel Inspection Mandate. The Towing Safety Advisory 
Committee recommendation that the Coast Guard rule should 
include a safety management system as a core component would 
provide an additional and important safeguard for preventing 
incidents like the Mel Oliver in the future. Non-compliance 
with the safety management system is a leading indicator of 
casualties, and had the TSAC-recommended regulations been in 
place this year, the Coast Guard would have been notified when 
DRD Towing failed its third-party audit in May. That would have 
forced the company to either tighten up its procedures or risk 
losing its license to operate and its Coast Guard certification 
of inspection.
    So Mr. Chairman, our industry has been uncommonly 
progressive in partnering with Government to make our waterways 
safe and clean. Both this Subcommittee and the Coast Guard can 
count on AWO to be a willing partner in implementing these 
recommendations and learning whatever other lessons emerge from 
the hearing record or from the Coast Guard's accident 
investigation. We share your commitment to fulfilling the 
public trust and to operating on our Nation's waterways with 
constant attention to safety, stewardship and full compliance 
with the law.
    Thank you.
    Mr. Cummings. Thank you very much.
    Mr. Allegretti, you heard the testimony, and your second 
recommendation went to this targeted enforcement, I guess you 
might call it. When you heard the testimony of the Rear 
Admiral, does that fit with your recommendation?
    Mr. Allegretti. It absolutely does. It is long overdue and 
we should get on with it immediately. Our industry does not 
like sharing the river with bad actors. And as I said, we know 
that there are still pockets of substandard operation that 
exist on the river system, on our coasts and in our harbors. 
The Responsible Carrier Program has moved our industry forward 
immensely in the last 15 years. But as you said, sir, AWO is 
not a regulatory body. So we lack the regulatory authority to 
force people to do the right thing.
    A targeted enforcement program is, in our view, the most 
important and immediate action that we can take to ratchet up 
attention on those who deserve additional scrutiny from the 
Coast Guard.
    Mr. Cummings. You know, it is interesting, Mr. Dawicki and 
others, that the Coast Guard, in their testimony, particularly 
the Rear Admiral, constantly said these are professionals. And 
I respect that. But you all heard the Ranking Member, Mr. 
LaTourette, talk about how we need to maybe have some 
amendments to the law which create a heavier hammer over some 
folks to say, look, if you are going to do these things, you 
are going to be subject to some jail time. I just want to get 
your opinion on that, and then I am going to come back to you, 
Mr. Munoz, for your opinion.
    Mr. Dawicki, did you have an opinion on that?
    Mr. Dawicki. Yes, thank you, Mr. Chairman. I think the 
reality is you are scratching the surface. You think about 
these mariners today, they are poorly-paid. I think if you 
scratch the surface and you scratch a little bit deeper, you 
may or may not find out there was actually a captain assigned 
to that vessel or maybe not. Maybe they were sailing short-
handed. I don't know, I don't want to suggest I know.
    Mr. Cummings. I understand. But would you agree that we 
have to start somewhere?
    Mr. Dawicki. You have to start somewhere. But it really 
requires a comprehensive review. This industry should be no 
lesser regulated than the deep draft industry. The fact, in my 
short experience with this industry, I scratch my head and 
think about the liabilities that these companies put themselves 
under in the way they operate their vessels. I just can't 
believe it.
    Again, I came from the LNG industry, where the best of the 
best operated and we put money into the company, the ships and 
personnel. I can honestly say I have not seen that in this 
segment of the industry. So I think a comprehensive review of 
all of the laws must be undertaken in order to ensure that if 
you are regulating a deep draft vessel which travels from A to 
B, with very limited activity, and you are regulating the hell 
out of it, excuse my terms, and then you take a vessel that is 
operating in a coastal piloting arena or a river boat arena, 
where you have all kinds of activity going on, you are going to 
find that the standards are heavily outweighed. It is surreal 
to me. I think if you really look at it deeply, you will find 
that the international standards, as minimum standards, are a 
good place to start.
    Mr. Cummings. Mr. Tellez, do you have an opinion on that?
    Mr. Tellez. Yes, sir, Mr. Chairman. The only thing I would 
add is, when Mr. LaTourette's hammer comes down, let's make 
sure it comes down on the right head. In the real world, we 
don't fully expect an apprentice mate to buck the orders from 
high above unless he wants to terminate his career at that 
moment. Are we going to penalize someone for not making the 
left turn when in fact he was never trained or taught to make 
that left turn? We have to go beyond that person on the boat to 
the root cause of who allowed that person up there on their own 
and why they were allowed up there. So once again, when that 
hammer comes down, let's make sure it comes down on the right 
head.
    Mr. Cummings. Mr. Block, do you have an opinion?
    Mr. Block. I am going to agree with Mr. Tellez.
    Mr. Cummings. Let me ask you, Mr. Munoz, and then I want to 
get to my colleagues, since we have to be out of here, as a 
matter of fact, I am going to go to Mr. LaTourette right now. 
Because we have to be out of here by a quarter of.
    Mr. LaTourette. Thank you, Mr. Chairman. I will be quick, I 
hope.
    Mr. Tellez, I agree with you and I think I said that, that 
I would propose to change title 46 to hold responsible the 
person that knowingly operates a vessel that he is not 
qualified to operate, or the person that commanded him to do it 
or the person that is responsible for him being in that 
position. I do not think it is unreasonable, when you are 
driving a boat, to have a lower standard than we would punish 
you for for driving a car, particularly when you are driving 
around with a bunch of oil.
    Mr. Dawicki, if I could just ask you a couple of questions. 
There was an article last year in 2007 about some resistance 
that you were having by some folks, discouraging fishermen and 
others from attending your safety workshops. Are you familiar 
with that discussion last year? Has that situation resolved 
itself?
    Mr. Dawicki. Actually, I believe fishing vessel safety, 
like this industry, run a parallel line. It is two unregulated 
industries that really need enhancing. Again, we are looking at 
saving the lives of mariners and ensuring that they can do the 
same things that you and I can do, Mr. LaTourette, put food on 
the table and educate our children and make sure that they have 
the same opportunities that you and I have.
    Mr. LaTourette. Can you briefly tell the Committee how many 
companies from the inland industry you have worked for, the 
number of employees that you have trained for those companies?
    Mr. Dawicki. We have been exposed to three or four 
companies since 1995, when I started at NMI. I don't know what 
the statistics are prior to that. I would have to ask my staff. 
In terms of training inland mariners, I would say maybe 
anywhere to 1,500 to 2,000 since 1995.
    Mr. LaTourette. Thank you.
    Mr. Munoz, your company continues to move petroleum 
products in the inland waterways. Could you briefly tell the 
Subcommittee just a couple of lessons learned from what 
happened in July, if there are any?
    Mr. Munoz. Yes, Congressman, we do continue to move liquid 
products on the inland waterways. Certainly some of the lessons 
learned in this exact incident are really hard-pressed for us 
to be able to really dig deep down right now to figure those 
out. Obviously we still have an ongoing Coast Guard 
investigation as well as an ongoing NTSB investigation. We do 
know some preliminary facts, and the preliminary facts that the 
Coast Guard has released is that the towing vessel that was 
operated by DRD Towing was being operated by a master that was 
not properly licensed. Also, that we had a situation where the 
captain of that vessel had abandoned the command of that 
vessel. So we have existing laws in place for those 
requirements today.
    And in getting to your question on increased enforcement, 
as I stated in my testimony, we certainly recommend that Coast 
Guard have targeted enforcement, based upon risk scenarios of 
companies. But yes, we do continue to operate today. And we are 
certainly prepared to take a good look at this investigation 
and make sure that we are able to spread some lessons learned 
from this incident.
    Mr. LaTourette. Thank you. Thank you, Mr. Chairman.
    Mr. Cummings. Mr. Baird.
    Mr. Baird. I thank the Chairman, and I thank our witnesses.
    I have the privilege of representing the Columbia River on 
the Washington State side, plus the Pacific Coast and the Puget 
Sound area. So we have a lot of experience with tug companies.
    I have been impressed since I came to Congress nine years 
ago that this is an industry that actually asks to be 
regulated. I think many of us in Congress are pretty familiar 
with sitting up here while people say, don't regulate us, don't 
do anything, we will take care of it. Here is an industry that 
for years now has been saying, we need tighter oversight, we 
need best practices, basically, with a goal of zero accidents. 
That is really what it ought to be. It is frankly refreshing.
    What puzzles me is, if we got word that al Qaeda was going 
to hatch a plot to drag a barge in front of a boat, we would 
move heaven and earth to stop it. Here we have proposals for 
best practices that would, I think, and my question is going to 
be, if the proposals you have put forward had been implemented 
and enforced and things monitored the way you are recommending, 
would we have avoided this accident and what would we avoid in 
the future? Mr. Allegretti?
    Mr. Allegretti. At the risk of suggesting that I have 20-20 
hindsight, which I don't, I think it is reasonable to say that 
if the Coast Guard regulations had been in place, there would 
have been a process whereby, when that auditor went to DRD 
Towing and then concluded the audit, and said, I am not able to 
certify you as being in compliance, in this case it was with 
our Responsible Carrier Program, in the future, it would be in 
compliance with the Coast Guard regulatory standards, he would 
have been obligated to immediately call the Coast Guard and 
inform them of that.
    I assume, again without being able to know exactly how the 
future system would work, that the Coast Guard would then 
immediately speak to the company to determine what the 
deficiency was and whether that deficiency was easily 
corrected, or whether it presented a risk in terms of a serious 
accident or injury or fatality and would take the appropriate 
action. That is what is missing now, Mr. Baird. The weight and 
effect of the Coast Guard's regulatory standard and enforcement 
is missing. Until we have that, it is going to be too easy for 
some people to look the other way in terms of the industry's 
best practices, because there is no consequence to ignoring 
them.
    Mr.  Baird. And there is a need, I understand also, for 
promptness. In other words, an audit that says, this company is 
deficient, they have practices that are questionable, if there 
is no prompt action on that, there may be every incentive for a 
company that is already skirting things to say, well, let's 
just wait until they catch us. And right now if they catch us, 
A, they are probably not going to and B, if they do, that is 
not a big deal if that do. If we told everybody the speed limit 
is 95 miles an hour and by the way, there are no cops on the 
road, and if they catch you they won't give you a ticket, it 
would be a spooky place to drive.
    And that is to some extent, and my colleague Mr. LaTourette 
and the Chairman pointed that out, to some extent we have a 
very dangerous situation not being regulated the way it should 
be. I want to commend those of you who have been advocating for 
this, and Mr. Chairman, I think it is incumbent upon us and 
upon the Coast Guard to move this forward. We would move 
quickly if there were intentional threats to maritime safety 
from outside entities. Now we have internal threats and we are 
not moving as swiftly as we should.
    So I want to thank all of you for you initiative to try to 
move this forward. If there are any other comments you would 
like to make, I would welcome those. Mr. Tellez?
    Mr. Tellez. Yes, sir. The other danger here is, on any 
given day, the Coast Guard could tell you who is on any vessel 
that is in our waters, the regulated vessels. They can attest 
and confirm their skill sets because of documentation and 
certification. They would be hard pressed to do that for the 
rivers. I don't imagine there is anybody out there who can tell 
us who is on every vessel, what their skills sets are, what 
their qualifications are, on any given day.
    Mr. Baird. Even minimum?
    Mr. Tellez. Even minimum, sir.
    Mr. Baird. If I am driving down the road, I know there will 
be some illegal people who didn't get their driver's license. 
But I am assuming most drivers have met certain verbal and 
practical tests through the driver's license bureau.
    Mr. Tellez. For the most part, in your world, Puget Sound 
and the Columbia River, those are regulated vessels up there. 
So there is some oversight and there is a whole host of 
information readily available at a touch of a button. That is 
not the case on the rivers. Again, I tell you, there is no one 
who can tell you who is on every vessel that is plying the 
rivers right now, today.
    Mr. Baird. I thank you for that insight.
    Any others? Mr. Block?
    Mr. Block. I think one of the problems is that we don't 
know who any of the deck hands are, we don't know any of the 
background. They don't have any Z cards. Not only deck hands, 
we are talking about the people who take the place of 
engineers, deckineers or others that may be untrained. What 
about cooks? These people are completely under the Coast Guard 
radar. I don't know how many there are, or who they are, or 
where they came from. I know that many companies draw very 
heavily upon prison systems. I don't want to take it out on 
people who are being rehabilitated.
    But at the same time, what about the TWIC card? Is that 
going to apply to deck hands on inland vessels? How about 
vessels under 100 gross tons as well? And people are sneaking 
huge vessels under the tonnage requirements.
    Mr. Baird. We may think deck hand, it may sound like not 
necessarily skilled, but if you hook up a tow in the wrong way, 
which is I assume what deck hands do, you now have a tow 
floating loose down the river.
    Mr. Block. And who has trained them? That is another 
problem. And is there any training that some of these companies 
require? Some do not require any training. There are NAVICs 
that the Coast Guard has put out. But our association is very 
critical of two of these NAVICs. One of them, I can't think of 
the numbers right now, but it has to do with training deck 
hands. Another one has to do with engineering personnel. The 
engine rooms are becoming much more complicated nowadays. And 
the Coast Guard requires nothing in the way of training.
    Thank you.
    Mr. Baird. Thank you. Thank you, Mr. Chairman.
    Mr. Cummings. Just one question, Mr. Munoz. Why do you all 
have this complicated arrangement where you lease out the barge 
for a dollar and then you pay them to do the work? Why is that? 
Why do you do that? Is that an unusual arrangement?
    Mr. Munoz. Chairman Cummings, it is not an unusual 
arrangement in the industry. If I may, before I answer your 
question, if I could just correct the record. I heard several 
times from the panel today that we are an unregulated industry. 
We in fact are not an unregulated industry. We are bound by the 
rules and regulations in 33 and 46 C.F.R. I just wanted to 
correct the record for that.
    As far as your question, Mr. Chairman, the situation where 
a vessel that may be owned by an operator and is bareboat 
chartered out to a third-party operator for a dollar a day, 
whether that vessel is chartered out for a dollar a day or 
$100,000 a day, that cost would just come back to us when we 
recharter the vessel on a term charter contract. So it is an 
accounting measure.
    The reason that is done primarily is because companies such 
as our company, we are based in Jeffersonville, Indiana, our 
main business focus is line haul towing, meaning we move 
commodities long distances throughout the river systems in the 
United States. When our barges and those products get to the 
origins or destination points where they either load or unload, 
there is a whole host of local companies whose business it is 
to shift those barges to or from terminals or do shorter 
shifting. Those local companies have the local knowledge of the 
river system. They can tap into the local markets from a labor 
perspective. So in a lot of ways, they are better suited to be 
able to staff those vessels and tap into that market, and with 
the knowledge of the local rivers.
    Mr. Cummings. Did you know of the history of DRD, its 
history in violating the law? Did you have knowledge of that? 
And would that have had a bearing on your decision to enter 
into the kind of arrangements that you just talked about?
    Mr. Munoz. Chairman Cummings, as far as the history that 
has been detailed today and the incidents that have come out as 
part of this investigation and in subsequent articles, we did 
not know of a history of DRD manning vessels without approved 
mariners or illegally licensed mariners, I should say.
    Mr. Cummings. So do you go about a vetting process? It 
seems like the equipment that you are leasing is very valuable 
and the liability seems to be quite, the potential is great. Do 
you do a vetting process at all?
    Mr. Munoz. Yes, sir, Mr. Chairman, we do. Let me just say 
that there is absolutely no incentive for a company like ours 
to charter or do business with a third-party operator if they 
are not a prudent operator. That does not make any economic 
sense whatsoever for us. We have to make sure that we entrust 
our equipment and our customers' cargo to prudent operators. 
Yes, we do have a vetting program for all of our third-party 
vendors. In fact, DRD was part of that vetting process and we 
had in fact vetted DRD.
    Mr. Cummings. We have to be out of this room, but Mr. 
Taylor just came in and I can tell you have a question or two. 
We have to be out of here, unfortunately.
    Mr. Taylor. I would just like to open this up to the panel. 
My gut tells me that we have an enforcement problem that had 
there been a high presence, had there been the certainty of the 
offending party that they were going to get stopped, I don't 
think they would have sent an unlicensed operator out there. I 
have been here for 19 years now, and what I have often seen is 
Congress overreact to a situation. So I want to open it up very 
quickly to the panel, if you could in one minute or less tell 
me what you think Congress ought to do to try and prevent this 
from happening, I would appreciate your thoughts.
    I will start with Mr. Allegretti.
    Mr. Allegretti. I can be brief, Mr. Taylor. I thought Mr. 
Cummings captured it very well. We need two things. We need 
stricter rules, and once the Coast Guard publishes the notice 
of proposed rulemaking, we will be on our way to stricter 
rules. And we need stricter enforcement. Admiral Watson 
committed this morning to a targeted enforcement program, which 
we think is exactly the way to go.
    Mr. Taylor. Mr. Tellez?
    Mr. Tellez. Along with strict enforcement, I don't know if 
that does it all. Because strict enforcement of a broken 
system, the system is still broken. I think what needs to 
happen out there is again, I go back to confirmation of skill 
sets, identification of the people who are actually out there 
doing the work. As Mr. Baird said, it is a little crazy to hear 
us ask for more regulation or more oversight. But I think that 
is what is needed. More documentation, more accountability. And 
the programs that Mr. Allegretti is involved in will work.
    Mr. Block. I believe that the Subcommittee has looked at 
the problems very diligently. In listening to Chairman 
Cummings' introductory remarks, you know a great deal about 
what is going on. We have been happy to furnish information to 
you. We believe the information has been used well. Keep up the 
good work. The more you know about us, the better you will be 
able to regulate the industry. And thank you for all of your 
efforts.
    Mr. Dawicki. Thank you, Mr. Taylor.
    I think, again, enforcement is, that is the easy part. It 
is having the right regulatory infrastructure in place, having 
the right system in place, and actually looking at the industry 
as a vital industry to the sound economic principles of how we 
need to operate the United States. I think this is an industry 
that does require regulation and enhancement of regulation. 
Thanks.
    Mr. Munoz. Congressman Taylor, let me first say that we 
support a program of targeted enforcement by the Coast Guard. 
We also, and that targeted enforcement should be based on 
casualty review. We also look forward to the conclusion of the 
findings as part of this investigation of this incident and 
look forward to working with this Committee and the Coast Guard 
for lessons learned.
    Mr. Taylor. Mr. Munoz, in the minute and a half I have 
left, I take it you represent American Commercial Barge Line?
    Mr. Munoz. Yes.
    Mr. Taylor. I appreciate the importance of local knowledge 
when you are dropping off your barges. I caught that point. But 
it does seem like a fairly convoluted process, when you take a 
multimillion dollar towboat, renting it to someone for a buck 
and then hiring your own boat back. So in the 20 minutes we 
have left, would you explain for my benefit why you do this? 
Again, I caught the local knowledge part.
    Mr. Munoz. Yes, Congressman Taylor. It is not a decision 
that is made based solely on economics. It is a decision that 
is made based on the fact that we have that asset, we have 
invested the capital in that asset. Quite frankly, it may not 
be our core business in some areas to shift barges in origins 
or destination points that our vessels may not go to.
    I understand you caught the fact about the local knowledge. 
That is an important piece of the bareboat charter arrangement. 
Being able to contract with companies that operate in those 
areas, do this for a living and give us that wider knowledge of 
that local area, absolutely.
    Mr. Taylor. Why would you use your boats to do that? Why 
couldn't you just contract with a true third party to do that?
    Mr. Munoz. Because in a lot of situations, we have the 
boats necessary. There is not an abundant supply of motor 
vessels out on the river system right now that are not being 
used. We have those assets. We may have assets that we have 
either in a laid-up fashion that we can have quick access to, 
that are at the fit and ready for staffing of crews.
    Mr. Taylor. Just for clarification, the insurer of that 
bareboat, that is the responsibility of the person that you 
lease it to as far as the insurance, as far as the Oil 
Pollution Act of 1990 and the Harbor Workers Insurance, 
maritime insurance necessary for the crew?
    Mr. Munoz. Mr. Congressman, let me try to clear things up a 
little bit.
    Mr. Cummings. You are going to have to clear it up very 
quickly.
    Mr. Munoz. Under the terms of the bareboat charter, that 
operator steps in the shoes of the owner of the vessel, crews 
the vessel and insures the vessel. However, for the certificate 
of financial responsibility in this incident on the barge, 
absolutely no liability was shifted for the oil spill response 
certificate of financial responsibility. We stepped up, we are 
continuing to clean the process.
    Mr.  Taylor. How about for the tug? Because I am told it 
was carrying 23,000 gallons of fuel, which in itself could be a 
pretty good spill.
    Mr. Munoz. Maximum capacity fuel in that vessel was 23,600 
gallons. It is the responsibility of the operator, unless 
negotiated differently, to insure that vessel for pollution.
    Mr. Taylor. Thank you, Mr. Chairman.
    Mr. Cummings. Thank you all very much. We really appreciate 
everything that you all have had to say.
    There will be some follow-up questions, particularly to 
you, Mr. Munoz. I did not get a chance to ask one tenth of the 
questions that I wanted to ask, but I will get them to you.
    Thank you very much. This meeting is adjourned.
    [Whereupon, at 1:58 p.m., the Subcommittee was adjourned.]

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