[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Proposed Rules]
[Pages 23705-23724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11189]


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DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 96

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

[CGD 95-073]
RIN 2115-AF44


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

AGENCY: Coast Guard, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to develop regulations which parallel 
the international requirements for safety management systems required 
of companies and their U.S. vessels that are engaged on foreign 
voyages. This action is mandated by the Coast Guard Authorization Act 
of 1996. These proposed regulations will allow responsible persons and 
their U.S. vessel(s) to develop safety management systems to enhance 
vessel operating safety and reduce pollution incidents in compliance 
with internationally and nationally mandated deadlines. The proposed 
regulations will also permit recognized organizations to receive 
authorization from the U.S. to audit safety management systems and 
issue international convention certificates.

DATES: Comments must reach the Coast Guard on or before July 30, 1997. 
Comments sent to the Office of Management and Budget (OMB) on 
collection of information must reach OMB on or before June 30, 1997.

ADDRESSES: You may mail comments to the Executive Secretary, Marine 
Safety Council (G-LRA/3406) (CGD 95-073), U.S. Coast Guard 
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or 
deliver them to room 3406 at the same address between 9:30 a.m. and 2 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is (202) 267-1477. You must also mail comments on collection of 
information to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, 725 17th Street NW., Washington, DC 20503, 
ATTN: Desk Officer, U.S. Coast Guard.
    The Executive Secretary maintains the public docket for this 
rulemaking. Comments, and documents as indicated in this preamble, will 
become part of this docket and will be available for inspection or 
copying at room 3406, U.S. Coast Guard Headquarters, between

[[Page 23706]]

9:30 a.m. and 2 p.m., Monday through Friday, except Federal holidays. 
The material proposed for incorporation by reference is available for 
inspection at room 1210, U.S. Coast Guard Headquarters.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Gauvin, Project Manager, 
Vessel and Facility Operating Standards Division (G-MSO-2), at (202) 
267-1053, or fax (202) 267-4570.

SUPPLEMENTARY INFORMATION:

Request for Comments

    The Coast Guard encourages interested persons to participate in 
this rulemaking by submitting written data, views, and arguments. 
Persons submitting comments should include their names and addresses, 
identify this rulemaking (CGD 95-073) and the specific section of this 
document to which each comment applies, and give the reason for each 
comment. Please submit two copies of all comments and attachments in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. Persons wanting acknowledgment of 
receipt of comments should enclose stamped, self-addressed postcards or 
envelopes.
    The Coast Guard will consider all comments received during the 
comment period. It may change this proposed rule in view of the 
comments.
    The Coast Guard plans no public hearing. Persons may request a 
public hearing by writing to the Marine Safety Council at the address 
under ADDRESSES. The request should include the reasons why a hearing 
would be beneficial. If it determines that the opportunity for oral 
presentations will aid this rulemaking, the Coast Guard will hold a 
public hearing at a time and place announced by a later notice in the 
Federal Register.
    This is the Coast Guard's first ``plain English'' regulation. 
Clear, more readable regulations are essential for the success of our 
government's reinvention initiative. We encourage your comments on this 
new way of writing regulations.

Background and Purpose

    This proposed rule is necessary to fulfill the mandates of 46 
U.S.C. 3203, as added by section 602 of the Coast Guard Authorization 
Act of 1996, Pub. L. 104-324, 110 Stat. 3901. The purpose of this rule 
is to establish a national safety management system and requirements 
for the development, documentation, auditing, certification and 
enforcement of responsible persons and vessel safety management systems 
consistent with the U.S. adopted international regulations of Chapter 
IX of the International Convention for the Safety of Life at Sea 
(SOLAS) 1974, as amended. Chapter IX of SOLAS, ``Management for the 
Safe Operation of Ships,'' requires that all vessels to which SOLAS is 
applicable, and their companies, have effective safety management 
systems developed to meet the performance elements of the International 
Safety Management (ISM) Code (International Maritime Organization (IMO) 
Resolution A.741(18)).
    Safety management systems for vessel transportation operations were 
first formalized in November 1987, in response to the HERALD OF FREE 
ENTERPRISE disaster, when the IMO adopted Resolution A.596(15), 
``Safety of Passenger Ro-Ro Ferries.'' This resolution concluded that 
vessel safety could be greatly enhanced by establishing improved vessel 
operating practices. It further requested that the IMO Maritime Safety 
Committee (MSC) and Marine Environmental Protection Committee (MEPC) 
develop guidelines for shipboard and shore-based management procedures 
for safer vessels and pollution prevention.
    On October 19, 1989, the MSC and MEPC guidelines for development of 
enhanced safety management practices were adopted by the IMO as 
Resolution A.647(16), ``Guidelines on Management for the Safe Operation 
of Ships and for Pollution Prevention.'' This first set of 
recommendations provided performance standards for the maritime 
industry on vessel safety management systems and encouraged continuous 
improvement in safety management skills within the maritime industry 
worldwide. It noted that vessel safety could be increased and 
environmental pollution decreased for all vessels which used documented 
company and vessel operating management practices. Safe operating 
practices, implemented through documented procedures and company 
policies, would provide better results in vessel safety than 
governments' attempts to regulate operating practices.
    IMO Resolution A.647(16) was endorsed by the U.S. and published as 
an enclosure to Navigation and Vessel Inspection Circular (NVIC) No. 1-
90, ``Recommendation Concerning Management Practices for Safe Ship 
Operation and Pollution Prevention,'' published August 17, 1990. NVIC 
1-90 recommendations were intended as guidelines for industry use. 
These guidelines were intended to document management procedures that 
increased the levels of safety aboard vessels and reduced pollution 
incidents. The Coast Guard concluded that operating efficiency and 
profitability is increased for a vessel, if the owner or managing 
operator provides effective supervision and plans a safety strategy 
which anticipates problems and provides direction to manage important 
day-to-day vessel and shore-based operations. It was also found that 
the effective use of a safety management system specifically enhances 
the ability of a company's shore-based personnel to respond to vessel 
operational needs or emergencies.
    Since the adoption of IMO Resolution A.647(16) in 1989, the MSC and 
MEPC have continued to refine and amend the performance standards and 
elements required for enhancement of safety management systems. This 
was because significant marine casualties continued to occur despite 
engineering and technological innovations. The Coast Guard's analysis 
of marine casualties over the past 30 years illustrated that the 
national and international maritime community applied engineering and 
technological solutions to promote safety and minimize the consequences 
of marine casualties. In an effort to further reduce casualties, the 
role of the ``human element'' in the maritime safety equation was 
evaluated.
    Recent casualty studies concluded that in excess of 80 percent of 
all high consequence marine casualties may be directly or indirectly 
attributable to the ``human element.''
    Consequently, the international maritime community saw the need to 
emphasize shipboard safety management practices to minimize human 
errors or omissions. These types of errors play a part in virtually 
every casualty, including those where structural or equipment failure 
may be the direct cause.
    During the last eight years, two subsequent IMO resolutions were 
adopted due to work by the MSC and MEPC that incorporated the earlier 
recommendations and guidelines. These IMO resolutions are:
     IMO Resolution A.681(17), adopted November 6, 1991, 
``Procedures for the Control and Operational Requirements Related to 
the Safety of Ships and Pollution Prevention''; and
     IMO Resolution A.741(18), adopted November 4, 1993, ``The 
International Management Code for the Safe Operation of Ships and for 
Pollution Prevention (International Safety Management (ISM) Code).''
    Adoption of these resolutions increased the performance elements 
required to enhance the marine management skill practices documented as 
part of the safety management

[[Page 23707]]

system. These new performance elements included:
     Written management procedures that document relevant 
national and international regulations which are applicable to vessel 
operations;
     Designation of a person within the company who is 
responsible to oversee and maintain the safety management system. This 
person has complete communication authority from the lowest employee 
level to the top management of the company to ensure that vessel 
operation problems reach all levels of management unobstructed; and
     Internal company auditing and reporting procedures to 
ensure continuous improvement to the safety management system by owner 
and managers.
    The U.S. has been at the forefront providing input, analysis and 
direction for MSC and MEPC development of these resolutions. The U.S. 
recognized that the human element needed to be addressed and initiated 
the Prevention Through People (PTP) program which examines and defines 
the critical role that the human element plays in maritime safety. The 
PTP concept asserts that safe and profitable operations require a 
systematic approach toward the constant and balanced interaction 
between the elements of management, the work environment, individual 
behavior, and appropriate technology. The ISM Code provides this 
systematic approach to the mariner with the policy and procedures 
needed to understand their duties and address the human element issues 
and risks that can prevent casualties from occurring. The voluntary 
certification of safety management systems by U.S. vessels in domestic 
trade supports the PTP strategies to bring government and industry 
together in making cultural change and partnerships to address the 
human element in maritime operations and pollution prevention.
    Accordingly, the Coast Guard endorsed the guidance provided by the 
ISM Code in IMO Resolution A.741(18), and provided it as a reference in 
NVIC No. 2-94 published March 15, 1994, ``Guidance Regarding Voluntary 
Compliance with the International Management Code for the Safe 
Operation of Ships and for Pollution Prevention.'' NVIC 2-94 canceled 
the earlier NVIC 1-90.
    In May 1994, Chapter IX of SOLAS, ``Management for the Safe 
Operation of Ships,'' was adopted at the IMO's Conference of 
Contracting Governments to SOLAS, 1974. Chapter IX of SOLAS mandates 
that all vessels subject to SOLAS, and their companies, have effective 
safety management systems developed and in use that conform to the 
performance elements of the ISM Code (IMO Resolution A.741(18)). 
Companies whose U.S. flag vessels trade internationally (engaged on a 
foreign voyage) and are subject to SOLAS, must have their safety 
management system externally audited and must receive the appropriate 
international certificates from the U.S. or from a recognized 
organization authorized to act on behalf of the U.S.
    The adoption of Chapter IX of SOLAS will become effective for 
companies whose vessels are subject to the provisions of SOLAS and are 
engaged in international trade as follows:
     Beginning July 1, 1998, for vessels transporting more than 
12 passengers; and tankers, bulk freight vessels, or high speed freight 
vessels of at least 500 gross tons; and
     Beginning July 1, 2002, for freight vessels and self-
propelled mobile offshore drilling units of at least 500 gross tons.
    The ISM Code marks a significant philosophical shift in the 
maritime community's approach by recognizing the human element's role 
in preventing marine casualties and ensuring vessels are operated 
responsibly in accordance with domestic and international standards. 
The ISM Code is seen as a major contributor to industry's self-
evaluation and action to address the human element concerns. It is 
intended to change the current approach of regulatory compliance from 
industry's passive defect notification and correction response mode to 
an aggressive approach to safety. Under this proactive approach, 
potential discrepancies are resolved by the companies themselves before 
casualties can occur.
    The ISM Code performance elements require the development of safety 
management systems which document and communicate the owner's policy, 
chain of authority, and operational and emergency procedures. It also 
requires management reviews, internal audits and corrections of non-
conformities in a company's management procedures. The documentation of 
a safety management system provides the basis for auditing the 
employee's knowledge, ashore and afloat, of the company's procedures 
and policies. It illustrates owner, manager and master responsibilities 
specifically and ensures that all national and international standards 
are documented in the system's procedures.
    To ensure that the U.S. public and maritime industry understood the 
mandatory requirements of the ISM Code, the Coast Guard published a 
notice in the Federal Register on October 5, 1995 (60 FR 52143). This 
notice explained the adoption of the ISM Code by the Contracting 
Parties of SOLAS, and scheduled four public meetings held at the 
following times and locations:
     October 30, 1995,--Federal Building, Seattle, Washington;
     November 1, 1995,--Port Authority Building, Long Beach, 
California;
     November 13, 1995,--Holiday Inn Downtown, New Orleans, 
Louisiana; and
     November 16, 1995,--Port Authority Building, New York 
City, New York.

At these public meetings, the Coast Guard received comments on 
implementation of the international requirements and provided a 
presentation on the U.S.'s voluntary safety management system 
guidelines in NVIC 2-94. Comments received at these meetings were audio 
taped and are a part of this docket.
    On January 26, 1996, RADM James C. Card, the Assistant Commandant 
for Marine Safety and Environmental Protection (G-M), sent a personal 
letter to each owner of a U.S. vessel required to be certificated by 
the international requirements of the ISM Code. This was done to ensure 
that the U.S. flag vessel owners understood that the U.S. had adopted 
Chapter IX of SOLAS, and the ISM Code would be mandatory for their 
companies and U.S. vessels.

Discussion of Proposed Rules

    The incorporation of the ISM Code's tenets into U.S. regulations is 
required by section 602 of the Coast Guard Authorization Act of 1996. 
This section added Chapter 32 ``Management of Vessels'' to Title 46 
U.S. Code. The Secretary of Transportation is required by 46 U.S.C. 
3203 to prescribe regulations that establish a safety management system 
for the responsible persons and vessels to which Subtitle II of 46 
applies. The safety management system must be consistent with the ISM 
Code and must include:
     A safety and environmental protection policy;
     Instructions and procedures to ensure safe operation of 
vessels and protection of the environment in compliance with 
international and U.S. law;
     Defined levels of authority and lines of communication 
between, and among, personnel onshore and on the vessel;
     Procedures to report accidents and nonconformities with 46 
U.S.C. chapter 32;

[[Page 23708]]

     Procedures to prepare for and respond to emergency 
situations; and
     Procedures for internal audits and management reviews of 
the system.
    The Secretary of Transportation's authority under 46 U.S.C. Chapter 
32 and 46 U.S.C. 3103 was delegated to the Commandant of the Coast 
Guard in title 49, Code of Federal Regulations (CFR), Sec. 1.46 (fff) 
and (ggg), published as a final rule in the Federal Register on April 
24, 1997 (62 FR 19935).

Safety Management System

    The Coast Guard is implementing the requirements for safety 
management systems and related requirements to implement the provisions 
of Chapter IX of SOLAS, in new 33 CFR part 96. To establish safety 
management system requirements, the Coast Guard is proposing to use 
existing industry based standards or previously adopted international 
standards to the greatest extent possible. Under the proposed rules, 
responsible persons and their U.S. vessels subject to Chapter IX of 
SOLAS and IMO Resolution A.741(18) will be able to meet these 
international requirements at the same time they comply with parallel 
U.S. statutory requirements and regulations. For those vessels or 
companies that are not subject to the SOLAS requirements and not 
required to meet these regulations, the proposed Sec. 96.210(c) permits 
them to voluntarily meet the standards of part 96 and Chapter IX of 
SOLAS. Proposed Secs. 96.220, 96.230, 96.240, and 96.250 establish the 
safety management system, and detail the specific objectives, 
functional requirements, documentation and reporting required for 
consistency with the ISM Code and to comply with Federal law.
    46 U.S.C. 3204 requires that responsible persons submit a safety 
management plan to the Secretary describing how they will comply with 
the regulations pertaining to the safety management system. The 
Secretary must review this plan to determine if it is consistent with 
and will assist in implementing the safety management system. Once 
compliance is assured, then the Secretary issues a Safety Management 
Certificate and a Document of Compliance certificate.
    Responsible persons are owners of vessels or other persons, 
organizations or companies who have assumed responsibility for the 
operation of a vessel from the owner. Responsible persons who are not 
owners have agreed to take over the duties and responsibilities imposed 
by the safety management system and the requirements of these proposed 
rules. To be consistent with these proposed regulations and the 
elements of the ISM Code, and for ease of understanding by the user of 
the regulations, the term ``company(nies)'' will be used in the place 
of responsible person(s) where needed for grammatical correctness and 
readability of the proposed regulations.
    Chapter IX of SOLAS does not contain requirements for, or a 
definition of, a ``safety management plan.'' SOLAS does require, 
however, specific documentation as part of an individual vessel's or 
company's safety management system. The nature of this documentation 
describes how the vessel or company will comply with the requirements 
of the ISM Code. Proposed Secs. 96.240 and 96.250 adopt SOLAS 
documentation and reporting requirements, which require the vessel or 
company to demonstrate how it complies with the ISM Code. As proposed 
here, the documentation and reporting requirements of proposed 
Secs. 96.240 and 96.250 will suffice as the ``safety management plan'' 
required by 46 U.S.C. 3204.
    Proposed Secs. 96.330 and 96.340 set forth requirements for a 
responsible person or company to obtain a Document of Compliance 
certificate or Safety Management Certificate. Proposed Secs. 96.350 and 
96.360 provide criteria for Interim Document of Compliance certificates 
and Interim Safety Management Certificates. These sections parallel IMO 
Resolution A.788(19), ``Guidelines on Implementation of the 
International Safety Management (ISM) Code by Administrations,'' 
adopted November 23, 1995.

Organizations Acting on Behalf of the U.S.

    Section 603 of the Coast Guard Authorization Act of 1996 (46 U.S.C. 
3103) permits the Secretary, and the Commandant through authority 
delegated from the Secretary as noted above, to rely on reports, 
documents and records of other reliable persons as evidence of 
compliance with Subtitle II of Title 46, U.S. Code. Under the authority 
of 46 U.S.C. 3103, this rulemaking will allow organizations previously 
recognized by the Coast Guard under 46 CFR part 8, to obtain 
authorization under proposed 33 CFR part 96, subpart D to audit safety 
management systems and issue Document of Compliance certificates and 
Safety Management Certificates on behalf of the U.S.
    The Coast Guard will only authorize organizations that are 
recognized in accordance with 46 CFR part 8, subpart B, ``Recognition 
of a Classification Society.'' Experience within other industries has 
shown that subject matter expertise is essential for proper functioning 
of a quality or safety management certification scheme. Use of the 
criteria in 46 CFR part 8, subpart B, will ensure that the 
organizations selected to be authorized by these proposed rules will 
have the expertise and capabilities to properly carry out this function 
for the U.S.
    Because the Coast Guard proposes to authorize recognized 
organizations to issue safety management system certificates, 
certification will not be completed directly by the Coast Guard. Coast 
Guard personnel would require extensive training and resources which 
already exists in the commercial industry. Commercial organizations 
recognized under 46 CFR part 8, and authorized under these proposed 
rules, already have the training and resources available to carry out 
the auditing requirements consistent with the international guidelines 
of the ISM Code. By permitting organizations to carry out this 
function, the Coast Guard will be able to effectively oversee the 
proper execution of regulatory implementation and certification. The 
implementation of these proposed regulations will better utilize Coast 
Guard resources to oversee these and other marine functions carried out 
by others on behalf of the U.S.
    Proposed 33 CFR part 96, subpart D sets the standard for 
organizations that will be authorized to act on behalf of the Coast 
Guard for the Flag Administration. This parallels the standards of IMO 
Resolution A.739(18), ``Guidelines for the Authorization of 
Organizations Acting on Behalf of the Administration,'' adopted 
November 4, 1993, and is incorporated by reference into the proposed 
rules. These international guidelines establish the minimum standards 
that each organization is reviewed for and must meet in order to 
complete safety management audits, marine surveys or inspections, and 
certifications on behalf of a Flag Administration.
    The authorization of foreign based classification societies under 
these proposed rules in subpart D will be subject to the reciprocity 
requirements of Sec. 96.430(a)(5). This section is based on 46 U.S.C. 
3316 as amended by the Coast Guard Authorization Act of 1996. This 
statute requires reciprocity to the American Bureau of Shipping for 
certain delegations of authority to foreign based classification 
societies.
    Proposed Sec. 96.440 establishes requirements, consistent with the 
guidelines in IMO Resolution A.739(18), for organizations seeking 
authorization to act on behalf of the U.S. Proposed

[[Page 23709]]

Sec. Sec. 96.430, 96.440, and 96.450 establish requirements for 
authorization requests and agreements of authorization between 
recognized organizations and the Coast Guard. Following the 
international guidelines incorporated into these proposed sections will 
ensure that organizations selected by the Coast Guard to act on behalf 
of the U.S. have the qualifications acceptable by all parties to SOLAS 
worldwide.
    In order to ensure that authorized organizations maintain the high 
standards necessary to perform audits and issue certificates on behalf 
of the U.S., proposed Sec. 96.470 provides for an annual Coast Guard 
evaluation of an organization's audit procedures. If the organization 
fails to maintain the standards established in part 96, subpart D, the 
Coast Guard can terminate the organization's authorization under 
proposed Sec. 96.470. Certificates issued by that organization will 
remain valid until the certificate expiration date or the next periodic 
safety management audit date, whichever occurs first. An organization 
which has its authorization terminated is required under proposed 
Sec. 96.490 to provide a written explanation of its loss of 
authorization and a list of organizations authorized to act on behalf 
of the U.S. to the responsible persons for companies and vessels 
certificated by that organization. The organization must explain the 
status of the companies and vessels, and how certificates can be 
transferred to another U.S. authorized organization.
    Proposed Sec. 96.495 establishes the appeal procedures for a 
responsible person who does not agree with actions taken by the 
authorized organizations for their company's or vessel's safety 
management system. By permitting responsible persons to appeal directly 
to the Commandant, Coast Guard oversight of actions by authorized 
organizations is ensured.

Safety Management Audits for U.S. Companies

    In order to verify that a vessel or the company represented by a 
responsible person is in compliance with the requirements of the safety 
management system established under proposed Secs. 96.220, 96.230, 
96.240, and 96.250, safety management audits will be performed by the 
authorized organizations under proposed Sec. 96.320. This requires that 
audits be performed consistent with IMO Resolution A.788(19).
    In addition to safety management audits performed initially to 
verify compliance with the safety management system, 46 U.S.C. 3205(c) 
requires periodic reviews to determine continued compliance with the 
safety management system. The proposed rules require a responsible 
person to request periodic safety management audits, to be performed in 
accordance with proposed Sec. 96.320. Periodic audits are defined in 
proposed Secs. 96.330(f) and 96.340(e)(2).
    In the event that a responsible person fails to request a periodic 
audit, or if a major non-conformity is found within a company's or 
vessel's safety management system during a safety management audit, the 
Coast Guard may revoke the company's Document of Compliance certificate 
or a vessel's Safety Management Certificate. If a Document of 
Compliance certificate is revoked, all Safety Management Certificates 
issued to the vessel(s) owned and operated by that responsible person, 
will become invalid under proposed Sec. 96.340(e)(3). This is because, 
without a valid Document of Compliance certificate, all such vessels 
are operating under a non-conforming safety management system. After a 
company resumes operations under a valid Document of Compliance 
certificate, the responsible person for the company's vessel(s) must 
request and complete a satisfactory safety management audit prior to 
receiving a valid Safety Management Certificate.

Compliance and Enforcement

    To ensure compliance with the ISM Code requirements by vessels in 
U.S. waters, proposed Sec. 96.380 permits the Coast Guard to board U.S. 
and foreign vessels to determine if the safety management system is 
being observed and practiced during vessel operations. During this 
process, the Coast Guard will also verify that a valid copy of the 
company's Document of Compliance certificate and a valid vessel Safety 
Management Certificate are on board. A vessel may be detained under 
authority of this proposed section, if its personnel are not following 
its safety management system or if the vessel is not carrying the 
appropriate certificates. Proposed Sec. 96.390 authorizes the Coast 
Guard to deny entry of a vessel into a port or terminal under the 
authority of 46 U.S.C. 3204(c).
    For vessels from a country not a party to Chapter IX of SOLAS, 
proposed Sec. 96.370 requires those vessels to have evidence of a 
safety management system consistent with the ISM Code. Failure to 
comply will subject these vessels to the compliance and enforcement 
procedures of proposed Sec. 96.380.

Amendments to Existing Regulations

    A second category of proposed rules will amend existing general 
SOLAS certification regulations to incorporate the requirements for 
safety management systems in various parts of 46 CFR for specific 
vessel types. These regulatory amendments will expand upon current 
applicability of SOLAS certification and the safety management 
certification for each U.S. vessel type engaged in international trade, 
and are referenced to 33 CFR part 96 as follows:
     Vessel Inspections, International Convention for the 
Safety of Life at Sea, 1974. (46 CFR 2.01-25);
     Tank vessel, Safety Management Certificate (46 CFR 31.40-
30);
     Passenger vessel, Safety Management Certificate (46 CFR 
71.75-13);
     Freight vessel, Safety Management Certificate (46 CFR 
91.60-30);
     Self-propelled mobile offshore drilling unit, Safety 
Management Certificate (46 CFR 107.415);
     Small passenger vessel, Safety Management Certificate (46 
CFR 115.925);
     Offshore supply vessel, Safety Management Certificate (46 
CFR 126.480);
     Small passenger vessel, Safety Management Certificate (46 
CFR 176.925); and
     Oceanographic research vessel, Safety Management 
Certificate (46 CFR 189.60-30).
    The third category of proposed rules specifically involves safety 
management system certification for approximately 72 U.S. small 
passenger vessels and their responsible persons. These U.S. small 
passenger vessels involved in international trade are divided into two 
categories:
     Small passenger vessels which must meet 46 CFR, subchapter 
T, parts 175 through 185 (known in the U.S. marine industry as ``T 
boats''); and
     Small passenger vessels which must meet 46 CFR, subchapter 
K, parts 114 through 122 (known in the U.S. marine industry as ``K 
vessels'').
    The Coast Guard reviewed the management strategies used by U.S. 
small passenger vessels (less than 100 gross tons) certificated under 
SOLAS for international trade. The Coast Guard's G-M Business Plan 
requires that there be a recognition between different types of 
passenger vessels to determine the types of risks and management 
strategies affecting their operations. Of the 72 U.S. small passenger 
vessels potentially affected by this proposed rulemaking, approximately 
54 vessels fall into the ``T boat'' category. This review showed that T 
boats which carry less than 49 passengers overnight and not more than 
150 passengers, and operate on routes less than 20 miles

[[Page 23710]]

from shore in international trade, are typically manned and operated by 
small companies made up of one to five employees. In these cases, the 
responsible person for the vessel is usually the vessel's operator or 
master, who is involved in every decision and action related to the 
management and operation of that vessel. In light of the nature of 
these vessels' operations, and the fact that the owner oversees the 
vessels everyday, a safety management system meeting the requirements 
of these proposed rules could be seen as overwhelming for a small 
company with limited resources.
    Historical vessel casualty information on these small passenger 
vessels was reviewed to determine any basis of risk. The review did not 
indicate a larger than normal risk when compared to other T boats in 
operation within U.S. domestic waters only. This review of historical 
casualty information included only vessel incidents involving 
groundings, allisions, collisions, propulsion equipment failures, 
pollution incidents, fires and navigational errors. This review of 
casualty information did not include incidents which occurred on these 
vessels that were reported as marine casualties, which included only 
personal injuries, such as: Diving accidents; slips and falls; 
passenger medical ailments; passenger illnesses; or other such non-
vessel related mishaps to passengers.
    Other factors determined from this review support the concept of 
hands-on, responsible person management of T boats. They include: 
Vessel employees with long tenures of employment (a number of these 
vessels are family owned and operated); vessels operate on short 
routes, close to shore on protected waters; a low number of passengers 
are carried; and a short amount of time is spent underway from shore or 
from the vessel's home dock.
    This review reinforced our belief that the existing oversight 
management strategies and hands-on operation of T boats by their 
responsible persons, can be considered equivalent to providing safety 
management systems for these specific 54 small passenger vessels.
    Small passenger vessels subject to the requirements of 46 CFR 
subchapter T have traditionally been allowed equivalencies to SOLAS 
requirements in accordance with Chapter I, Regulation 5 of SOLAS. This 
is allowed, if the equivalence is at least as effective as that 
required by the regulations. The existing SOLAS equivalency provision 
for these small passenger vessels is found at 46 CFR 176.930. Because 
equivalencies for ``T boats'' are currently allowed, the Coast Guard 
proposes to amend 46 CFR 176.930 to allow ``T boat'' owners to apply 
for an equivalence to the requirements of 33 CFR part 96, at their 
option. The Coast Guard plans on partnering with the responsible 
persons of this limited number of T boats to develop safety management 
systems that are equivalent to manage the risks these vessels see in 
their limited operations. Specific actions for equivalence applications 
will be provided by the Coast Guard as a separate directive from this 
rulemaking action, if the proposed revision to Sec. 176.930 is 
incorporated in the final rule.
    The remaining 18 small passenger vessels applicable to these 
proposed rules are regulated under subchapter K. ``K vessels'' are 
normally owned and operated by larger companies with similar management 
issues associated to those of deep draft fleets, such as: large number 
of passengers carried; large number of persons employed, onshore and 
onboard the vessels; unrestricted international routes with overnight 
underway capability; day to weekly underway operations from shore; and 
the responsible persons reliance on a management company to oversee and 
manage the day to day operation of the vessel. Furthermore, due to the 
complexity of the operation of these vessels, the crews require a 
higher level of training and management by the company.
    A historical vessel casualty review showed that K vessels in 
international trade had a higher risk of casualties than vessels of 
similar size in operation within U.S. domestic waters. The casualties 
reviewed for this determination were also vessel related casualties and 
did not include passenger injury or illness related incidents.
    Small passenger vessel owners not wishing to apply for an 
equivalence allowed for T boats or, whose vessels must comply with 46 
CFR subchapter K, must meet the safety management system requirements 
of the proposed regulations in 33 CFR part 96. Comments on this 
proposal are specifically requested.

Incorporation by Reference

    Material that would be incorporated by reference is listed in 
Sec. 96.130. The material is available for inspection where indicated 
under ADDRESSES. Copies of the material are available from the sources 
listed in Sec. 96.130.
    Before publishing a binding rule, the Coast Guard will submit this 
material to the Director of the Federal Register for approval of the 
incorporation by reference.

Regulatory Evaluation

    This proposed rule is not a significant regulatory action under 
section 3(f) of Executive Order 12866 and does not require an 
assessment of potential cost and benefits under section 6(a)(3) of that 
Order. It has not been reviewed by the Office of Management and Budget 
under that Order. It is not significant under the regulatory policies 
and procedures of the Department of Transportation (DOT) (44 FR 11040, 
February 26, 1979).
    A draft Regulatory Evaluation under paragraph 10e of the regulatory 
policies and procedures of DOT is available in the docket for 
inspection or copying where indicated under ADDRESSES. A summary of the 
Evaluation follows:
    The Coast Guard estimates that the proposed regulations will affect 
approximately 370 U.S. vessels registered for international trade, 
which are owned by approximately 153 different owners. Of these owners, 
approximately 96 own 190 U.S. vessels which will be required to comply 
with these proposed rules by July 1, 1998. Of the remaining 180 U.S. 
vessels, 57 owners must comply by July 1, 2002. The proposed 
regulations will also affect any owners or vessels that voluntarily opt 
to meet the requirements of proposed 33 CFR part 96.
    The Coast Guard expects that the total costs for ISM Code 
implementation falls into two categories for each company affected. The 
first category involves costs incurred by the responsible persons to 
have their company and vessel(s) safety management system externally 
audited and certificated. The second category involves the development 
and training costs for safety management systems.

Audit and Certification Costs

    The Coast Guard surveyed a small representative group of companies 
that operate U.S. vessels and the three organizations (American Bureau 
of Shipping (ABS), Det Norske Veritas (DNV), and Lloyd's Register of 
Shipping (LRS)), that had been accepted to complete the voluntary 
auditing and certification of safety management systems in accordance 
with NVIC 2-94. Because actual audit and certification costs are 
internal to the company's profit and loss determinations, and therefore 
proprietary, the companies surveyed provided cost estimates only. The 
three organizations provided cost estimates for services involving 
initial audits and certification for companies and their vessel(s). All 
cost data provided varied widely due to the size of the company, number 
of personnel, type of vessels and the number of

[[Page 23711]]

vessels owned and engaged in international trade.
    To clearly describe the costs of audit and certification, companies 
have been separated into three categories of large, medium and small 
sized companies, based on the number of personnel required to operate a 
company and the number of vessels a company operates.
    Large size companies. Included here are 71 companies which own 
approximately 275 U.S. vessels that must meet the requirements of these 
proposed rules. These companies operate deep draft tankers (liquid and 
gas carriers), freight vessels (container, roll-on/roll-off (RO-RO), 
combination, break bulk carriers), bulk vessels (ore and grain 
carriers), and self-propelled mobile offshore drilling units.
    It is estimated that the external audit and certification cost for 
these companies are:
     Initial audit and certification of company=$7,000.
     Company periodic certificate audit (4)=approx. $7,000 per 
audit.
     Initial audit and certification of vessel=$5,000.
     Vessel intermediate certificate audit (1)=approx. $5,000.
    The costs for initial audit and certification of 71 large 
companies, plus 4 yearly periodic audits during the life of each 
certificate, is estimated at $497,000 annually. [(number of companies) 
x  5 (certification + audits)  x  cost / 5 (years) = $ total cost per 
year] The costs for audit and certification of 275 vessels owned by 
large companies, plus one intermediate audit during the life of each 
certificate, is estimated at $550,000 annually. [(number of vessels) 
x  2 (certification + audit)  x  cost / 5 (years) = $ total cost per 
year] The total cost per year for the certification of large size 
companies and their vessels is estimated at $1,047,000 per year after 
July 1, 2002.
    Between July 1, 1998, and July 1, 2002, 40 of these large size 
companies and 157 of their vessels will not be required to be 
certificated due to the later effective date of the proposed rules for 
freight vessels and self-propelled mobile drilling units. Between July 
1, 1998, and July 1, 2002, cost estimates for certification of safety 
management systems per year would be reduced to $217,000 for companies 
and $236,000 for vessels. A total cost is estimated at $453,000 
annually from July 1, 1998, to July 1, 2002.
    Medium size companies. These include 17 companies with 23 U.S. 
vessels. These companies operate oceangoing tugs, industrial support 
vessels (offshore supply service vessels, cable laying vessels, etc.), 
and research vessels.
    It is estimated that the audit and certification cost for these 
companies are:
     Initial audit and certification of company=$5,000.
     Company periodic certificate audit (4)=approx. $5,000 per 
audit.
     Initial audit and certification of vessel=$3,000.
     Vessel intermediate certificate audit (1)=approx. $3,000.
    Therefore, the cost for audit and certification of 17 medium size 
companies, plus four yearly periodic audits per the life of each 
certificate, is estimated at $85,000 annually. The cost for audit and 
certification of 23 vessels owned by medium size companies, plus one 
intermediate audit per life of certificate, is estimated at $27,600 
annually. A total cost per year for certification actions of all medium 
size companies owning U.S. vessels is estimated at $112,600 per year. 
It must be remembered that due to the type of vessels that fall into 
this size company category, the effective date for implementation of 
safety management systems for all medium size companies would be July 
1, 2002.
    Small size companies. These include 65 companies, which own 72 U.S. 
vessels. These companies own U.S. passenger vessels engaged in a 
foreign voyage while carrying 12 or more passengers. The proposed rules 
will become effective for all passenger vessels on July 1, 1998. Small 
size companies include T boats and K vessels.
    It is estimated that the average audit and certification costs for 
these companies are:
     Initial audit and certification of company=$1,000.
     Company periodic certificate audit (4)=$500 per audit.
     Initial audit and certification of vessel=$800.
     Vessel intermediate certificate audit (1)=$500.
    The cost for initial audit and certification of 65 small size 
companies, plus 4 yearly periodic audits per the life of each 
certificate, is estimated at $39,000 annually. The cost for initial 
audit and certification of 72 vessels owned by small size companies, 
plus 1 intermediate audit per the life of each certificate, is 
estimated at $18,720 annually. The total estimated cost per year for 
certification actions of all small size companies owning U.S. vessels 
equals $57,720.
    However, this proposed rule provides an alternative to alleviate 
the costs imposed on some of these small companies. It is proposed that 
T boats, be provided with an equivalence to Chapter IX of SOLAS under 
their inspection for certification by the U.S. This equivalence would 
cover the 53 owners of the 54 U.S. small passenger vessels (1 owner 
owns 2 vessels). If that occurs, no further cost for certification 
would be incurred by these small passenger vessels, as this examination 
of the vessel and company's safety management systems would be 
completed as part of the Coast Guard's examination for issuance of the 
Certificate of Inspection (COI). This is already covered under the 
vessel's user fee.
    Of the K vessels not covered by the SOLAS equivalence proposed in 
this rulemaking, the 12 owners of the 18 U.S. vessels would be required 
to develop and have their company and vessel(s) safety management 
systems audited and certificated by July 1, 1998.
    Total audit and certification cost. The total cost for audit and 
certification is estimated at $514,780 annually for the period July 1, 
1998, through June 30, 2002. On July 1, 2002, the cost will increase to 
an estimated $1,217,280 annually. This is because additional U.S. 
vessels and companies will be required to comply with Chapter IX of 
SOLAS and 46 U.S.C. 3203(a). This cost may increase or decrease after 
that time due to the fluctuation in the number of companies and U.S. 
vessels which are registered to be engaged in international trade. The 
Coast Guard encourages the maritime industry and the general public to 
submit comments on these estimated costs.

Safety Management System Development and Employee Training Costs

    To ascertain the costs to develop safety management systems and to 
train employees to use these systems, the Coast Guard surveyed a small 
representative group of U.S. vessel owners and operators that developed 
safety management systems consistent with IMO resolutions. Some of 
those surveyed voluntarily certificated their company and vessel(s) 
safety management systems in accordance with Coast Guard NVIC 2-94.
    When surveyed on the specific costs required to develop a safety 
management system, the general response was that the companies could 
not provide a detailed or accurate cost assessment until they had seen 
the proposed regulations. Some indicated that their company had already 
developed and certificated quality assurance programs as part of, or 
prior to, development of a safety management

[[Page 23712]]

system, and could not provide data on initial development costs. In 
those cases, their internal costs were marginal to meet the ISM Code 
requirements, as compared to the companies who must develop safety 
management systems under these proposed rules. Others indicated that 
the development of quality assurance and safety management systems are 
a component of the cost of doing business because these systems are 
required by contractual agreements. Consequently, they were unable to 
attribute specific costs to safety management system development.
    Overall, it is difficult to determine the incremental costs 
incurred by these companies to develop safety management systems. This 
is because these systems are developed for companies that can range in 
size from the operation of one small passenger vessel by its owner, who 
is the vessel's master, to a U.S. oceangoing container vessel company 
with thousands of employees and 37 deep draft vessels. Development 
costs will also depend on whether a company internally develops its 
safety management system or hires an outside consultant to do it. The 
various types of vessels, companies, and the requirements necessary to 
run any one of them, will affect development costs. Therefore, it is 
requested that comments, data, and documentation on the costs to 
develop a safety management system be submitted by vessel owners, 
operators, the maritime industry and the general public.
    Training costs include the instruction of personnel in the new 
safety management systems, both ashore and aboard vessels, and the 
documentation of training in the company's safety management systems to 
meet the ISM Code. These costs can include on-the-job reading, 
classroom training provided by the company to its employees, consultant 
training programs completed in house, and on-the-job demonstration and 
training drills.
    Training costs will also vary due to the wide range of companies 
required to comply with these regulations. For example, training costs 
for a company that has 5,000 employees will be much higher than the 
training costs of a company with 5 employees.
    Training costs are also effected by the fact that many shipboard 
personnel of U.S. vessels engaged in international trade have received 
training regarding the performance elements of the ISM Code through the 
implementation of the 1995 Amendments to the International Convention 
of Training, Certification, and Watchkeeping for Seafarers (STCW), 
1978. Thus, a substantial portion of these training costs may be 
related to STCW implementation, and not to ISM Code implementation.
    When surveyed on the costs involved to train employees on the use 
of safety management systems, cost estimates ranged from $10,000 for 
larger companies with deep draft vessels, to $0 for companies who had 
integrated their training costs into their normal safety training 
budget. So little information was received and the differences in 
estimates was such, that a valid estimate of training costs could not 
be made. It is believed that different factors, including those 
training costs of the STCW requirements, were combined into these cost 
statements. Due to the variation of the types of companies and vessels 
that will be subject to these proposed rules, the Coast Guard is 
requesting that the maritime industry and general public submit 
comments, data, and documentation on training costs expected to be 
incurred by companies and vessels of all sizes and varied 
organizational structure.

Benefits

    The Coast Guard expects that the proposed rule will have economic 
benefits and the potential to reduce marine casualties. With the 
development of safety management systems, a reduction in costs 
attributable to shipboard personnel injuries and liability is likely. A 
reduction of risk due to fewer vessel casualties and liabilities is 
also expected. Because safety management systems include pollution 
prevention procedures, the Coast Guard expects a reduction in pollution 
incidents which could result in environmental damage. It also expects 
reduced company and vessel liability and regulatory fines due to these 
incidents. Delays in vessel operation and scheduling can be eliminated 
or significantly reduced because the lines of authority and 
communication will be defined between personnel onshore and on the 
vessel. With fewer marine casualties, costs associated with insurance 
claims and vessel insurance premiums should also decrease.
    As with other industries, it is anticipated that preventive actions 
provided by clear and communicated procedures and policies will allow 
for proactive management styles. Over time, the maritime industry 
should realize substantial savings in cost that far outweigh start up 
and maintenance fees for safety management systems. These savings 
include reduction of: lost worker's hours due to injury, loss of vessel 
operation due to repairs, and costs due to fines and judicial actions 
against the company and its vessel(s). The Coast Guard specifically 
solicits comments on the benefits of this proposed action.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the 
Coast Guard must consider whether this proposed rule, if adopted, will 
have a significant economic impact on a substantial number of small 
entities. ``Small entities'' include small businesses, not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    This rulemaking will affect U.S. oceangoing vessels of specific 
categories of more than 500 gross tons, or passenger vessels of any 
size carrying more than 12 passengers in international trade. The 
greatest impact will fall on large U.S. oceangoing shipping companies, 
which have 1 to 37 deep draft vessels over 500 gross tons and are not 
considered as small business concerns or small business entities.
    Today, there are approximately 5,600 small and large passenger 
vessels certificated for operation under the U.S. flag. Approximately 
370 of those U.S. flag vessels will be affected by this proposed rule 
and the mandatory requirements of the ISM Code. Out of those 370 U.S. 
vessels, approximately 72 are small passenger vessels on limited 
international routes in the sportfishing, tourism and cruising trade. 
Only the small passenger vessel companies appear to have less than 500 
employees within their firms or claim gross revenues far below the 
defined base of a small entity. Thus, for the purposes of this 
rulemaking, the 72 small passenger vessels are the only companies that 
appear to meet the definition of a small entity under this section.
    Costs for these small passenger vessels to develop a safety 
management system, provide training and document procedures will be 
considerably less than larger companies due to the limited number of 
employees, routes, and passengers. Most of these companies operate with 
less than 5 employees. In some cases, the owner is the master of the 
vessel, and the crew are close relatives of the owner. There is long 
term tenure of the employees in these small companies, and since most 
positions aboard are unlicensed or undocumented, training consists of 
basic operations which are required to be documented by the existing

[[Page 23713]]

regulations for small passenger vessels in 46 CFR.
    Furthermore, the Coast Guard proposes to permit vessels in the ``T 
boat'' category to comply with the ISM Code through an equivalence 
under 46 CFR part 176.930, at their option. This would eliminate the 
$860.00 certification cost for each vessel, per year, as discussed in 
the preceding cost/benefit analysis. All 54 of the ``T boats'' may opt 
to satisfy these requirements by that equivalence.
    An initial evaluation showed that the cost of this rulemaking would 
not have a significant economic impact on a substantial number of small 
business entities as described above. Therefore, the Coast Guard 
certifies that under 5 U.S.C. 605(b), this proposal, if adopted, will 
not have a significant impact on a substantial number of small 
entities. If however, you think that your business or organization 
qualifies as a small entity and that this proposal will have a 
significant economic impact on your business or organization, please 
submit a comment (see ADDRESSES) explaining why you think it qualifies 
and in what way and to what degree this proposal will economically 
effect it.

Assistance for Small Entities

    In accordance with section 213(a) of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard 
wants to help small entities understand this proposed rule so they can 
better evaluate its effects on them and participate in the rulemaking 
process. If your small business is affected by this rule and you have 
questions concerning its provisions or options for compliance, please 
contact Mr. Robert M. Gauvin, Project Manager, Vessel and Facility 
Operating Standards Division (G-MSO-2), at (202) 267-1053, or fax (202) 
267-4570.

Collection of Information

    The proposed rule provided for a collection of information under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). As 
defined in 5 CFR 1320.361, ``collection of information'' includes 
reporting, recordkeeping, monitoring, posting, labeling, and other 
similar actions. The title and description of the information 
collections, a description of the respondents, and an estimate of the 
total annual burden follow. Included in the estimate is the time for 
reviewing instructions, searching existing sources of data, gathering 
and maintaining the data needed, and completing and reviewing the 
collection.

Summary of the Collection of Information

    This proposal contains collection-of-information requirements in 
the following sections: 33 CFR 96.250, 96.320, 96.330, 96.340, 96.350, 
96.360, and 46 CFR 2.01-25, 31.40-30, 71.75-13, 71.75-20, 91.60-30, 
91.60-40, 107.417, 115.925, 126.480, 175.540, 176.925, 176.930,189.60-
30, 189.60-40.
    DOT No.: 2115-0056; 2115-0626, and 2115.
    Administration: U.S. Coast Guard.
    Title: International Management Code for the Safe Operation of 
Ships and for Pollution Prevention (International Safety Management 
(ISM) Code).
    Need for Information: 46 U.S.C. Chapter 32 and Chapter IX of SOLAS 
require that U.S. companies and their vessels comply with the ISM Code. 
The ISM Code is a mandatory international convention requirement 
paralleled in U.S. law which will come into effect:
     On July 1, 1998, for passenger vessels, and tankers, bulk 
freight and high speed freight vessels over 500 gross tons engaged in 
foreign trade; and
     On July 1, 2002, for freight vessels and self-propelled 
mobile offshore drilling units over 500 gross tons engaged in foreign 
trade.
    Information showing the compliance status of responsible persons 
and their U.S. vessels must be provided to the Coast Guard by 
recognized organizations authorized by the Coast Guard to act on behalf 
of the U.S. To comply, a responsible person, company and vessel(s) 
owned and operated by that person, must establish a safety management 
system and prepare internal audit reports for the responsible person's 
company and vessel(s) which demonstrate compliance with the ISM Code. 
Preparation of these reports requires a new information collection.
    Title 46, chapter 32 also requires that a responsible person's 
company and U.S. vessel(s) possess Document of Compliance certificates 
and Safety Management Certificates, respectively, as evidence of 
compliance with the ISM Code. Recognized organizations authorized to 
act on behalf of the U.S. and the Coast Guard will issue these 
certificates. To prepare and issue these certificates, an amendment to 
existing 2115-0056 is required.
    Safety management systems will be externally audited and reported 
on by the authorized, recognized organizations through a review of the 
internal audit reports prepared by a company. Since the Coast Guard 
reviews this information that documents the ISM Code compliance, 2115-
0626 requires amendment.
    Proposed use of Information: The information will be used by the 
Coast Guard or recognized organizations authorized to act on behalf of 
the U.S. to determine if responsible persons and their vessels are 
complying with the ISM Code. If in compliance, Document of Compliance 
certificates and Safety Management Certificates will be issued.
    Frequency of Response: Initially, all responsible persons who own 
or operate U.S. vessels subject to these proposed rules will develop 
their internal auditing system and recordkeeping requirements. Once 
established, these procedures will state when internal audits and 
reports of the audits will be completed and reviewed, at the discretion 
of the responsible person. These reports will be reviewed by authorized 
recognized organizations during safety management audits of both the 
company and its vessel(s) safety management systems. It is expected 
that, at a minimum, an internal audit report will be prepared prior to 
each safety management audit.
    Company safety management systems will be externally audited once 
to verify compliance with the ISM Code and to issue a company its 
Document of Compliance certificate. The Document of Compliance 
certificate is valid for five years and requires that an annual 
verification audit be completed. After five years, one renewal safety 
management audit will be conducted and a new certificate will be 
issued.
    Once a company receives its Document of Compliance certificate, its 
U.S. flag vessel(s) will undergo an initial safety management audit, to 
verify compliance with the ISM Code and to issue a Safety Management 
Certificate. The Safety Management Certificate is valid for five years 
and requires one intermediate verification audit during that time. 
After five years, one renewal safety management audit will be conducted 
and a new certificate will be issued.
    Recognized organizations authorized to complete certification 
actions on safety management systems for the U.S. will complete 
external audit reports which will be reviewed by the Coast Guard at a 
minimum of once a year.
    Burden of Response: Companies of various sizes will be required to 
maintain internal audit reports in order to comply with the ISM Code. 
The burden of compliance is expected to be lower for those U.S. 
companies with few employees and/or vessels because less documentation 
will be required, and thus, preparation time is shorter. Preparation of 
these internal reports will allow companies and vessels to continuously 
be certificated to

[[Page 23714]]

international safety management system requirements. Additionally, 
recognized organizations, acting on behalf of the U.S., will review 
these internal reports during safety management audits, and will then 
prepare external audit reports which document a company or vessel's 
compliance or non-compliance with the ISM Code. If in compliance, 
Document of Compliance certificates and Safety Management Certificates 
will be issued by the organizations. External audit reports and 
certificates will be reviewed by the Coast Guard.
    The burden estimate for the companies and their vessels is as 
follows:
     Small passenger vessels (T boats); 54  x  .5 hours (per 
report)=27.0 annually.
     Other vessels; 316 (vessels)  x  1 hour (audit report)  x  
.4 (report frequency)=126.4 hours.
     Company review of audits; [316 (vessels)  x  2 hour (audit 
report)  x  .4 (frequency of report)] + [100 (companies)  x  2 hours 
(audit review)]=452.8 hours.
    It is estimated that the recognized organizations will expend the 
following personnel hours to review internal audit reports, prepare 
external audit reports, and issue certificates to companies and U.S. 
vessels:
     Review of internal audit reports: [2 (audits/year/company) 
 x  4 hours (complete report + review report)  x  100 (companies)] + [2 
(audits/year/vessels)  x  5 hours (complete report + review report)  x  
316 (vessels)]=3,960 hours.
     Review of external audit reports; [316 + 100 (U.S. vessels 
and companies)/5 years]  x  .5 hours=41.6 hours.
     Endorsement of Document of Compliance certificates; 100 
(companies)  x  .25 hours=25 hours.
     Endorsement of Safety Management Certificates; 316 
(vessels)  x  .25 hours/5 years=15.8 hours.
     Vessel and company handling of certificates; 416 
(certificates)  x  .25 hours/5 years=20.8 hours.
    It is expected that the Coast Guard will review audits and 
certificates and expend the following estimated personnel hours:
     For small passenger vessels; 54 (vessels)  x  .5 
(hours)=27.0 hours.
     For other vessels; 316 (vessels)  x  .5 (hours)  x  .4 
(frequency)=63.2 hours.
     Review of recognized organization actions and reports on 
vessels; 316 (vessels)  x  3 (hour)=948 hours.
    Number of Respondents: Companies and their U.S. vessels which are 
over 500 gross tons or carry more than 12 passengers, engaged in 
international trade. Recognized organizations who opt to apply for 
authorization to act on behalf of the U.S. to review and certificate 
the safety management systems of companies and their U.S. vessels.
    Estimated Total Annual Burden: The Coast Guard is submitting the 
required information to OMB for review under section 3504 (h) of the 
Paperwork Reduction Act. It is estimated that the following annual 
hours are required to complete the record and reportkeeping required by 
this proposal:
     Companies and U.S. vessels--3,981 hours for internal audit 
reports.
     Recognized Organizations--1,168 hours for external audit 
reports and certification requirements.
     Coast Guard--559 hours for review of audit reports, 
certificates, and company data.
    As required by section 3507(d) of the Paperwork Reduction Act of 
1995, the Coast Guard has submitted a copy of this proposed rule to the 
Office of Management and Budget (OMB) for its review of the collection 
of information.
    The Coast Guard solicits public comment on the proposed collection 
of information to (1) evaluate whether the information is necessary for 
the proper performance of the functions of the Coast Guard, including 
whether the information would have practical utility; (2) evaluate the 
accuracy of the Coast Guard's estimate of the burden of the collection, 
including the validity of the methodology and assumptions used; (3) 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) minimize the burden of the collection on those who 
are to respond, as by allowing the submittal of responses by electronic 
means or the use of other forms of information technology.
    Persons submitting comments on the collection of information should 
submit their comments both to OMB and to the Coast Guard where 
indicated under ADDRESSES by the date under DATES.
    Persons are not required to respond to a collection of information 
unless it displays a currently valid OMB control number. Before the 
requirements for this collection of information become effective, the 
Coast Guard will publish notice in the Federal Register of OMB's 
decision to approve, modify, or disapprove the collection.

Federalism

    The Coast Guard has analyzed this proposed rule under the 
principles and criteria contained in Executive Order 12612 and has 
determined that this proposed rule does not have sufficient 
implications for federalism to warrant the preparation of a Federalism 
Assessment.

Environment

    The Coast Guard considered the environment impact of this proposed 
rule and concluded that under paragraph 2.B.2.e(34) of Commandant 
Instruction M16475.1B, this proposed rule is categorically excluded 
from further environmental documentation. Paragraph 2.B.2.e(34)(d) 
categorically excludes regulations concerning manning, documentation, 
measurement, inspection and equipping of vessels. A ``Categorical 
Exclusion Determination'' is available in the docket for inspection or 
copying where indicated under ADDRESSES.

List of Subjects

33 CFR Part 96

    Administrative practice and procedure, Incorporation by reference, 
Marine Safety, Reporting and recordkeeping requirements, Safety 
management systems, Vessels.

46 CFR Part 2

    Marine safety, Reporting and recordkeeping requirements, Vessels.

46 CFR Part 31

    Cargo vessels, Marine safety, Reporting and recordkeeping 
requirements, Safety management systems.

46 CFR Part 71

    Marine safety, Passenger vessels, Reporting and recordkeeping 
requirements, Safety management systems.

46 CFR Part 91

    Cargo vessels, Marine safety, Reporting and recordkeeping 
requirements, Safety management systems.

46 CFR Part 107

    Marine safety, Oil and gas exploration, Reporting and recordkeeping 
requirements, Safety management systems, Vessels.

46 CFR Part 115

    Marine safety, Passenger vessels, Report and recordkeeping 
requirements, Safety management systems.

46 CFR Part 126

    Marine safety, Offshore supply vessels, Reporting and recordkeeping 
requirements, Safety management systems.

46 CFR Part 175

    Marine safety, Passenger vessels, Report and recordkeeping 
requirements, Safety management systems.

[[Page 23715]]

46 CFR Part 176

    Marine safety, Passenger vessels, Report and recordkeeping 
requirements, Safety management systems.

46 CFR Part 189

    Marine safety, Oceanographic research vessels, Reporting and 
recordkeeping requirements, Safety management systems.
    For the reasons discussed in the preamble, the Coast Guard proposes 
to amend 33 CFR Ch. I and 46 CFR Ch. I as follows:
    1. Add part 96 to read as follows:

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

Subpart A--General

Sec.
96.100  Purpose.
96.110  Who does this subpart apply to?
96.120  Definitions.
96.130  Incorporation by reference.

Subpart B--Company and Vessel Safety Management Systems

96.200  Purpose.
96.210  Who does this subpart apply to?
96.220  What makes up a safety management system?
96.230  What objectives must a safety management system meet?
96.240  What functional requirements must a safety management system 
meet?
96.250  What documents and reports must a safety management system 
have?

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

96.300  Purpose.
96.310  Who does this subpart apply to?
96.320  What is involved to complete a safety management audit and 
when is it required to be completed?
96.330  Document of Compliance certificate: What is it and when is 
it needed?
96.340  Safety Management Certificate: What is it and when is it 
needed?
96.350  Interim Document of Compliance certificate: What is it and 
when can it be used?
96.360  Interim Safety Management Certificate: What is it and when 
can it be used?
96.370  What are the requirements for vessels of countries not party 
to Chapter IX of SOLAS?
96.380  How will the Coast Guard handle compliance and enforcement 
of these regulations?
96.390  When will the Coast Guard deny entry into a U.S. port?

Subpart D--Authorization of Recognized Organizations to Act on Behalf 
of the U.S.

96.400  Purpose.
96.410  Who does this subpart apply to?
96.420  What authority may an organization ask for under this 
subpart?
96.430  How does an organization submit a request to be authorized?
96.440  How will the Coast Guard decide whether to approve an 
organization's request to be authorized?
96.450  What happens if the Coast Guard disapproves an 
organization's request to be authorized?
96.460  How will I know what the Coast Guard requires of my 
organization if my organization receives authorization?
96.470  How does the Coast Guard terminate an organization's 
authorization?
96.480  What is the status of a certificate if the issuing 
organization has its authority terminated?
96.490  What further obligations exist for my organization if the 
Coast Guard terminates its authorization?
96.495  How can I appeal a decision made by an authorized 
organization?

    Authority: 46 U.S.C. 3201 et. seq.; 46 U.S.C. 3103; 46 U.S.C. 
3316, as amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; 49 
CFR 1.45, 49 CFR 1.46.

Subpart A--General


Sec. 96.100  Purpose.

    This subpart implements Section 602, ``Safety Management'' (46 
U.S.C. 3201-3205) of the Coast Guard Authorization Act of 1996 (Pub. L. 
104-324, 110 Stat. 3901), which requires responsible persons and their 
vessels to comply with the requirements of Chapter IX of the 
International Convention for the Safety of Life at Sea (SOLAS), 1974, 
International Management Code for the Safe Operation of Ships and for 
Pollution Prevention (International Safety Management (ISM) Code), 
adopted in London on May 24, 1994.

    Note: Chapter IX of SOLAS is available from the International 
Maritime Organization, Publication Section, 4 Albert Embankment, 
London, SE1 75R, United Kingdom, Telex 23588. Please include 
document reference number ``IMO-190E'' in your request.


Sec. 96.110  Who does this subpart apply to?

    This subpart applies to you if--
    (a) You are a responsible person who owns a U.S. vessel(s) and must 
comply with Chapter IX of SOLAS;
    (b) You are a responsible person who owns a U.S. vessel(s) that is 
not required to comply with Chapter IX of SOLAS, but requests 
application of this subpart;
    (c) You are a responsible person who owns a foreign vessel(s) that 
trades in U.S. waters, which must comply with Chapter IX of SOLAS; or
    (d) You are a recognized organization applying for authorization to 
act on behalf of the U.S. to conduct safety management audits and issue 
international convention certificates.


Sec. 96.120  Definitions.

    As used in this part--
    Administration means the Government of the State whose flag the 
ship is entitled to fly.
    Authorized Organization Acting on behalf of the U.S. means an 
organization that is recognized by the Commandant of the U.S. Coast 
Guard under the minimum standards of subpart B of 46 CFR part 8, and 
has been authorized under this section to conduct certain actions and 
certifications on behalf of the United States.
    Captain of the Port (COTP) means the U.S. Coast Guard officer as 
described in 33 CFR 6.01-3, commanding a Captain of the Port zone 
described in 33 CFR part 3, or that person's authorized representative.
    Commandant means the Commandant, U.S. Coast Guard.
    Company means the owner of a vessel, or any other organization or 
person such as the manager or the bareboat charterer of a vessel, who 
has assumed the responsibility for operation of the vessel from the 
shipowner and who on assuming responsibility has agreed to take over 
all the duties and responsibilities imposed by this part or the ISM 
Code.
    Document of Compliance means a certificate issued to a company or 
responsible person that complies with the requirements of this part or 
the ISM Code.
    International Safety Management (ISM) Code means the International 
Management Code for the Safe Operation of Ships and Pollution 
Prevention, Chapter IX of the Annex to the International Convention for 
the Safety of Life at Sea (SOLAS), 1974.
    Non-conformity means an observed situation where objective evidence 
indicates the non-fulfillment of a specified requirement.
    Major non-conformity means an identifiable deviation which poses a 
serious threat to personnel or vessel safety or a serious risk to the 
environment and requires immediate corrective action; in addition, the 
lack of effective and systematic implementation of a requirement of the 
ISM Code is also considered a major non-conformity.
    Objective Evidence means quantitative or qualitative information, 
records or statements of fact pertaining to safety or to the existence 
and implementation of a safety management system element, which is 
based on observation, measurement or test and which can be verified.
    Officer In Charge, Marine Inspection (OCMI) means the U.S. Coast 
Guard officer as described in 46 CFR 1.01-15(b), in charge of an 
inspection zone described in 33 CFR part 3, or that person's authorized 
representative.

[[Page 23716]]

    Recognized organization means a national or international 
organization which has applied and been recognized by the Commandant of 
the Coast Guard to meet the minimum standards of 46 CFR part 8.
    Responsible person means--
    (a) The owner of a vessel to whom this part applies, or
    (b) Any other person that--
    (1) Has assumed the responsibility from the owner for operation of 
the vessel to which this part applies; and
    (2) Agreed to assume, with respect to the vessel, responsibility 
for complying with all the requirements of this part.
    (c) A responsible person may be a company, firm, corporation, 
association, partnership or individual.
    Safety management audit means a systematic and independent 
examination to determine whether the safety management system 
activities and related results comply with planned arrangements and 
whether these arrangements are implemented effectively and are suitable 
to achieve objectives.
    Safety Management Certificate means a document issued to a vessel 
which signifies that the responsible person or its company, and the 
vessel's shipboard management operate in accordance with the approved 
safety management system.
    Safety Management System means a structured and documented system 
enabling Company and vessel personnel to effectively implement the 
responsible person's safety and environmental protection policies.
    SOLAS means the International Convention for the Safety of Life at 
Sea, 1974, as amended.
    Vessel engaged on a foreign voyage means a vessel to which this 
part applies that is--
    (a) Arriving at a place under the jurisdiction of the United States 
from a place in a foreign country;
    (b) Making a voyage between places outside the United States; or
    (c) Departing from a place under the jurisdiction of the United 
States for a place in a foreign country.


Sec. 96.130  Incorporation by reference.

    (a) The Director of the Federal Register approves certain material 
that is incorporated by reference into this subpart under 5 U.S.C. 
552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in paragraph (b) of this section, the Coast Guard must 
publish notice of the change in the Federal Register and the material 
must be available to the public. You may inspect all material at the 
Office of the Federal Register, 800 North Capitol St., NW., Suite 700, 
Washington, DC and at the U.S. Coast Guard, Office of Design and 
Engineering Standards (G-MSE), 2100 Second St., SW., Washington, DC 
20593-0001, and receive it from the source listed in paragraph (b) of 
this section.
    (b) The material approved for incorporation by reference in this 
subpart and the sections affected are as follows:

American National Standards Institute (ANSI)

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

    ANSI/ASQC Q9001-1994, Quality Systems--Model for Quality 
Assurance in Design, Development, Production, Installation, and 
Servicing, 1994--96.430

International Maritime Organization IMO

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

Resolution A.741(18), International Management Code for the Safe 
Operation of Ships and for Pollution Prevention, November 4, 1993--
96.220, 96.370
Resolution A.788 (19), Guidelines on Implementation of the 
International Safety Management (ISM) Code by Administrations, 
November 23, 1995--96.320, 96.440
Resolution A.739(18), Guidelines for the Authorization of 
Organizations Acting on Behalf of the Administration, November 4, 
1993--96.440

Subpart B--Company and Vessel Safety Management Systems.


Sec. 96.200  Purpose.

    This subpart establishes the minimum standards that the safety 
management system of a company and its U.S. flag vessel(s) must meet 
for certification to comply with the requirements of 46 U.S.C. 3201-
3205 and Chapter IX of SOLAS, 974. It also permits companies with U.S. 
flag vessels that are not required to comply with this part to 
voluntarily develop safety management systems which can be certificated 
to standards consistent with Chapter IX of SOLAS.


Sec. 96.210  Who does this subpart apply to?

    (a) This subpart applies--
    (1) To a responsible person who owns or operates a
    U.S. vessel(s) engaged on a foreign voyage which meet the 
conditions of paragraph (a)(2) of this section;
    (2) To all U.S. vessels engaged on a foreign voyage that are--
    (i) A passenger vessel transporting 12 passengers or more; or
    (ii) A tanker, a bulk freight vessel, a freight vessel or a self-
propelled mobile offshore drilling unit (MODU) of 500 gross tons or 
more; and
    (3) To all foreign vessels engaged on voyages operating in U.S. 
waters and subject to Chapter IX of SOLAS.
    (b) This subpart does not apply to--
    (1) A barge;
    (2) A recreational vessel not engaged in commercial service;
    (3) A fishing vessel;
    (4) A vessel operating only on the Great Lakes or its tributary and 
connecting waters; or
    (5) A public vessel, which includes a U.S. vessel of the National 
Defense Reserve Fleet owned by the U.S. Maritime Administration and 
operated in non-commercial service.
    (c) Any responsible person and their company who owns and operates 
a U.S. flag vessel(s) which does not meet the conditions of paragraph 
(a) of this section, may voluntarily meet the standards of this part 
and Chapter IX of SOLAS and have their safety management systems 
certificated.
    (d) The effective date for the requirements of this part are--
    (1) On or after July 1, 1998, for--
    (i) Vessels transporting 12 or more passengers engaged on a foreign 
voyage; or
    (ii) Tankers, bulk freight vessels, or high speed freight vessel of 
at least 500 gross tons or more.
    (2) On or after July 1, 2002, for freight vessels and self-
propelled mobile offshore drilling units (MODUs) of at least 500 gross 
tons or more.


Sec. 96.220  What makes up a safety management system?

    (a) The safety management system must document the responsible 
person's--
    (1) Safety and pollution prevention policy;
    (2) Functional safety and operational requirements;
    (3) Recordkeeping responsibilities; and
    (4) Reporting responsibilities.
    (b) A safety management system must also be consistent with the 
functional standards and performance elements of IMO Resolution 
A.741(18).


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

    The safety management system must:
    (a) Provide written safe practices for vessel operation and a safe 
working environment for the type of vessel the system is developed for;
    (b) List safeguards against all identified risks;
    (c) List expected actions to continuously improve safety management 
skills of personnel ashore and aboard vessels, including preparation 
for emergencies related to

[[Page 23717]]

both safety and environmental protection; and
    (d) Ensure compliance with mandatory rules and regulations, and 
take into account all national, international, and industry guidelines, 
standards and codes when developing written procedures for the safety 
management system.


Sec. 96.240  What functional requirements must a safety management 
system meet?

    The functional requirements of a safety management system must 
include--
    (a) A written statement from the responsible person stating the 
company's safety and environmental protection policy;
    (b) Instructions and procedures to provide direction for the safe 
operation of the vessel and protection of the environment in compliance 
with Titles 33 and 46 of the U.S. Code, and international conventions 
to which the U.S. is a party (SOLAS, MARPOL, etc.);
    (c) Documents showing the levels of authority and lines of 
communication between shoreside and shipboard personnel;
    (d) Procedures for reporting accidents, near accidents, and 
nonconformities with provisions of the company's and vessel's safety 
management system;
    (e) Procedures to prepare for and respond to emergency situations 
by shoreside and shipboard personnel;
    (f) Procedures for internal audits on the operation of the company 
and vessel(s) safety management system; and
    (g) Procedures and processes for management review of company 
internal audit reports and correction of nonconformities that are 
reported by these or other reports.


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

    The documents and reports required for a safety management system 
under Sec. 96.330 or Sec. 96.340 must include the written documents and 
reports itemized in Table 96.250. These documents and reports must be 
available to the company's shore-based and vessel(s)-based personnel:

       Table 96.250 Safety Management System Documents and Reports      
------------------------------------------------------------------------
Type of documents and reports            Specific requirements          
------------------------------------------------------------------------
(a) Safety and environmental   (1) Meet the objectives of Sec.  96.230; 
 policy statements.             and                                     
                               (2) Are carried out and kept current at  
                                all levels of the company.              
(b) Company responsibilities   (1) The owners name and details of       
 and authority statements.      responsibility for operation of the     
                                company and vessel(s);                  
                               (2) Name of the person responsible for   
                                operation of the company and vessel(s), 
                                if not the owner;                       
                               (3) Responsibility, authority and        
                                interrelations of all personnel who     
                                manage, perform, and verify work        
                                relating to and affecting the safety and
                                pollution prevention operations of the  
                                company and vessel(s); and              
                               (4) A statement describing the company's 
                                responsibility to ensure adequate       
                                resources and shore-based support are   
                                provided to enable the designated person
                                or persons to carry out the             
                                responsibilities of this subpart.       
(c) Designation in writing of  (1) Have direct access to communicate    
 a person or persons to         with the highest levels of the company  
 oversee the safety             and with all management levels ashore   
 management system for the      and aboard the company's vessel(s);     
 company and vessel(s).                                                 
                               (2) Have the written responsibility to   
                                monitor the safety and environmental    
                                aspects of the operation of each vessel;
                                and                                     
                               (3) Have the written responsibility to   
                                ensure there are adequate support and   
                                shore-based resources for vessel(s)     
                                operations.                             
(d) Written statements that    (1) Carry out the company's safety and   
 define the Master's            environmental policies;                 
 responsibilities and                                                   
 authorities.                                                           
                               (2) Motivate the vessel's crew to observe
                                the safety management system policies;  
                               (3) Issue orders and instructions in a   
                                clear and simple manner;                
                               (4) Make sure that specific requirements 
                                are carried out by the vessel's crew and
                                shore-based resources; and              
                               (5) Review the safety management system  
                                and report non-conformities to shore-   
                                based management.                       
(e) Written statements that    (1) Ability to make decisions about      
 the Master has overriding      safety and environmental pollution; and 
 responsibility and authority                                           
 to make vessel decisions.                                              
                               (2) Ability to request the company's help
                                when necessary.                         
(f) Personnel procedures and   (1) Masters of vessels are properly      
 resources which are            qualified for command;                  
 available ashore and aboard                                            
 ship.                                                                  
                               (2) Masters of vessels know the company's
                                safety management system;               
                               (3) Owners or companies provide the      
                                necessary support so that the Master's  
                                duties can be safely performed;         
                               (4) Each vessel is properly crewed with  
                                qualified, certificated and medically   
                                fit seafarers complying with national   
                                and international requirements;         
                               (5) New personnel and personnel          
                                transferred to new assignments involving
                                safety and protection of the environment
                                are properly introduced to their duties;
                               (6) Personnel involved with the company's
                                safety management system know the       
                                relevant rules, regulations, codes and  
                                guidelines;                             
                               (7) Needed training is identified to     
                                support the safety management system and
                                ensure that the training is provided for
                                all personnel concerned;                
                               (8) Communication of relevant procedures 
                                for the vessel's personnel involved with
                                the safety management system is in the  
                                language(s) understood by them; and     
                               (9) Personnel are able to communicate    
                                effectively when carrying out their     
                                duties as related to the safety         
                                management system.                      

[[Page 23718]]

                                                                        
(g) Vessel safety and          (1) Define tasks; and                    
 pollution prevention                                                   
 operation plans and                                                    
 instructions for key                                                   
 shipboard operations.                                                  
                               (2) Assign qualified personnel to        
                                specific tasks.                         
(h) Emergency preparedness     (1) Identify, describe and direct        
 procedures.                    response to potential emergency         
                                shipboard situations;                   
                               (2) Set up programs for drills and       
                                exercises to prepare for emergency      
                                actions; and                            
                               (3) Make sure that the company's         
                                organization can respond at anytime, to 
                                hazards, accidents and emergency        
                                situations involving their vessel(s).   
(i) Reporting procedures on    (1) Report non-conformities of the safety
 required actions.              management system;                      
                               (2) Report accidents;                    
                               (3) Report hazardous situations to the   
                                owner or company; and                   
                               (4) Make sure reported items are         
                                investigated and analyzed with the      
                                objective of improving safety and       
                                pollution prevention.                   
(j) Vessel maintenance         (1) Inspect vessel's equipment, hull, and
 procedures. (These             machinery at appropriate intervals;     
 procedures verify that a                                               
 company's vessel(s) is                                                 
 maintained in conformity                                               
 with the provisions of                                                 
 relevant rules and                                                     
 regulations, with any                                                  
 additional requirements                                                
 which may be established by                                            
 the company.).                                                         
                               (2) Report any non-conformity with its   
                                possible cause, if known;               
                               (3) Take appropriate corrective actions; 
                               (4) Keep records of these activities;    
                               (5) Identify specific equipment and      
                                technical systems that may result in a  
                                hazardous situation if a sudden         
                                operational failure occurs;             
                               (6) Identify measures that promote the   
                                reliability of the equipment and        
                                technical systems identified in         
                                paragraph (j)(5), and regularly test    
                                standby arrangements and equipment or   
                                technical systems not in continuous use;
                                and                                     
                               (7) Include the inspections required by  
                                this section into the vessel's          
                                operational maintenance routine.        
(k) Safety management system   (1) Procedures which establish and       
 document and data              maintain control of all documents and   
 maintenance.                   data relevant to the safety management  
                                system;                                 
                               (2) Documents are available at all       
                                relevant locations, i.e., each vessel   
                                carries on board all documents relevant 
                                to that vessel's operation;             
                               (3) Changes to documents are reviewed and
                                approved by authorized personnel; and   
                               (4) Outdated documents are promptly      
                                destroyed.                              
(l) Safety management system   (1) Periodic evaluation of the safety    
 internal audits which verify   management system's efficiency and      
 the safety and pollution       review of the system in accordance with 
 prevention activities.         the established procedures of the       
                                company, when needed;                   
                               (2) Types and frequency of internal      
                                audits, when they are required, how they
                                are reported, and possible corrective   
                                actions, if necessary;                  
                               (3) Determining factors for the selection
                                of personnel, independent of the area   
                                being audited, to complete internal     
                                company and vessel audits; and          
                               (4) Communication and reporting of       
                                internal audit findings for critical    
                                management review and to ensure         
                                management personnel of the area audited
                                take timely and corrective action on    
                                deficiencies found.                     
------------------------------------------------------------------------

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


Sec. 96.300  Purpose.

    This subpart establishes the standards for the responsible person 
of a company and its vessel(s) to obtain the required and voluntary, 
national and international certification for the company's and vessel's 
safety management system.


Sec. 96.310  Who does this subpart apply to?

    This subpart applies:
    (a) If you are a responsible person who owns a vessel(s) registered 
in the U.S. and engaged on foreign voyages;
    (b) If you are a responsible person who owns a vessel(s) registered 
in the U.S. and volunteer to meet the standards of this part and 
Chapter IX of SOLAS;
    (c) To all foreign vessels engaged in foreign trade operating in 
U.S. waters and subject to Chapter IX of SOLAS; or
    (d) If you are a recognized organization authorized by the U.S. to 
complete safety management audits and certification required by this 
part.


Sec. 96.320  What is involved to complete a safety management audit and 
when is it required to be completed?

    (a) A safety management audit is any of the following:
    (1) An initial audit which is carried out before a Document of 
Compliance certificate or a Safety Management Certificate is issued;
    (2) A renewal audit which is carried out before the renewal of a 
Document of Compliance certificate or a Safety Management Certificate;
    (3) Periodic audits including--
    (i) An annual verification audit, as described in Sec. 96.330(f) of 
this part, and
    (ii) An intermediate verification audit, as described in 
Sec. 96.340(e)(2) of this part.
    (b) A satisfactory audit means that the auditor(s) agrees that the 
requirements of this part are met, based on review and verification of 
the procedures and documents that make up the safety management system.
    (c) Actions required during safety management audits for a company 
and their U.S. vessel(s) are--
    (1) Review and verify the procedures and documents that make up a 
safety management system, as defined in subpart B of this part.

[[Page 23719]]

    (2) Make sure the audit complies with this subpart and is 
consistent with IMO Resolution A.788(19), Guidelines on Implementation 
of the International Safety Management (ISM) Code by Administrations.
    (3) Make sure the audit is carried out by a team of Coast Guard 
auditors or auditors assigned by a recognized organization authorized 
to complete such actions by subpart D of this part.
    (d) Safety management audits for a company and their U.S. vessel(s) 
are required--
    (1) Before issuing or renewing a Document of Compliance 
certificate, and to keep a Document of Compliance certificate valid, as 
described in Secs. 96.330 and 96.340 of this part.
    (2) Before issuing or renewing a Safety Management Certificate, and 
to maintain the validity of a Safety Management Certificate, as 
described in Sec. 96.340 of this part. However, any safety management 
audit for the purpose of verifying a vessel's safety management system 
will not be scheduled or conducted for a company's U.S. vessel unless 
the company first has undergone a safety management audit of the 
company's safety management system, and has received its Document of 
Compliance certificate.
    (e) Requests for all safety management audits for a company and its 
U.S. vessel(s) must be communicated--
    (1) By a responsible person directly to a recognized organization 
authorized by the U.S.
    (2) By a responsible person within the time limits for an annual 
verification audit, described in Sec. 96.330(f) of this part, and for 
an intermediate verification audit, described in Sec. 96.340(e)(2) of 
this part. If he or she does not make a request for a safety management 
annual or verification audit for a valid Document of Compliance 
certificate issued to a company or a valid Safety Management 
Certificate issued to a vessel, this is cause for the Coast Guard to 
revoke the certificate as described in Secs. 96.330 and 96.340 of this 
part.
    (f) If a non-conformity with the safety management system is found 
during the audit, it must be reported in writing to the company's owner 
or vessel's master by the auditor as described in IMO Resolution 
A.788(19).


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

    (a) You must hold a valid Document of Compliance certificate if you 
are the responsible person who, or company which, owns a U.S. vessel 
engaged in foreign voyages, carrying 12 or more passengers, or is a 
tanker, bulk freight vessel, freight vessel, or a self-propelled mobile 
offshore drilling unit of 500 gross tons or more.
    (b) You may voluntarily hold a valid Document of Compliance 
certificate, if you are a responsible person who, or a company which, 
owns a U.S. vessel not included in paragraph (a) of this section.
    (c) You will be issued a Document of Compliance certificate only 
after you complete a satisfactory safety management audit as described 
in Sec. 96.320 of this part.
    (d) All U.S. and foreign vessels that carry 12 or more passengers 
or a tanker, bulk freight vessel, freight vessel, or a self-propelled 
mobile offshore drilling unit of 500 gross tons or more, must carry a 
valid copy of the company's Document of Compliance certificate onboard 
when on a foreign voyage.
    (e) A valid Document of Compliance certificate covers the type of 
vessel(s) on which a company's safety management system initial safety 
management audit was based. The validity of the Document of Compliance 
certificate may be extended to cover additional types of vessels after 
a satisfactory safety management audit is completed on the company's 
safety management system which includes those additional vessel types.
    (f) A Document of Compliance certificate is valid for 60 months. It 
must be verified annually through a safety management verification 
audit within three months before or after the certificate's anniversary 
date.
    (g) Only the Coast Guard may revoke a Document of Compliance 
certificate from a company which owns a U.S. vessel. The Document of 
Compliance certificate may be revoked if--
    (1) The annual safety management audit and system verification 
required by paragraph (f) of this section is not requested by the 
responsible person; or
    (2) Major non-conformities are found in the company's safety 
management system during a safety management audit or other related 
survey or inspection being completed by the Coast Guard or the 
recognized organization chosen by the company or responsible person.
    (h) When a company's valid Document of Compliance certificate is 
revoked by the Coast Guard, a satisfactory safety management audit must 
be completed before a new Document of Compliance certificate for the 
company's safety management system can be reissued.


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

    (a) Your U.S. vessel engaged on a foreign voyage must hold a valid 
Safety Management Certificate if it carries 12 or more passengers, or 
if it is a tanker, bulk freight vessel, freight vessel, or a self-
propelled mobile offshore drilling unit of 500 gross tons or more.
    (b) Your U.S. vessel may voluntarily hold a valid Safety Management 
Certificate even if your vessel is not required to by paragraph (a) of 
this section.
    (c) Your U.S. vessel may only be issued a Safety Management 
Certificate or have it renewed when your company holds a valid Document 
of Compliance certificate issued under Sec. 96.330 of this part and the 
vessel has completed a satisfactory safety management audit of the 
vessel's safety management system set out in Sec. 96.320 of this part.
    (d) A copy of your company's valid Document of Compliance 
certificate must be on board all U.S. and foreign vessels which carry 
12 or more passengers, and must be onboard a tanker, bulk freight 
vessel, freight vessel, or a self-propelled mobile offshore drilling 
unit of 500 gross tons or more, when engaged on foreign voyages or 
within U.S. waters.
    (e) A Safety Management Certificate is valid for 60 months. The 
validity of the Safety Management Certificate is based on--
    (1) A satisfactory initial safety management audit;
    (2) A satisfactory intermediate verification audit requested by the 
vessel's responsible person, completed between the 24th and 36th month 
of the anniversary date of the certificate; and
    (3) A vessel's company holding a valid Document of Compliance 
certificate. When a company's Document of Compliance certificate 
expires or is revoked, the Safety Management Certificate for the 
company-owned vessel(s) is invalid.
    (f) Renewal of a Safety Management Certificate requires the 
completion of a satisfactory safety management system audit which meets 
all of the requirements of subpart B of this part. A renewal of a 
Safety Management Certificate cannot be started unless the company 
which owns the vessel holds a valid Document of Compliance certificate.
    (g) Only the Coast Guard may revoke a Safety Management Certificate 
from a U.S. vessel. The Safety Management Certificate will be revoked 
if--
    (1) The vessel's responsible person does not ask for and complete a 
satisfactory intermediate safety management audit required by paragraph 
(e)(2) of this section; or
    (2) Major non-conformities are found in the vessel's safety 
management system during a safety management

[[Page 23720]]

audit or other related survey or inspection being completed by the 
Coast Guard or the recognized organization chosen by the vessel's 
responsible person.


Sec. 96.350  Interim Document of Compliance certificate: What is it and 
when can it be used?

    (a ) An Interim Document of Compliance certificate may be issued to 
help set up a company's safety management system when--
    (1) A company is newly set up or in transition from an existing 
company into a new company; or
    (2) A new type of vessel is added to an existing safety management 
system and Document of Compliance certificate for a company.
    (b) A responsible person for a company operating a U.S. vessel(s) 
that meets the requirements of paragraph (a) of this section, may send 
a request to a recognized organization authorized to act on behalf of 
the U.S. to receive an Interim Document of Compliance certificate that 
is valid for a period up to 12 months. To be issued the Interim 
Document of Compliance certificate the vessel's company must--
    (1) Demonstrate to an auditor that the company has a safety 
management system that meets Sec. 96.230 of this part; and
    (2) Provide a plan for full implementation of a safety management 
system within the period that the Interim Document of Compliance 
certificate is valid.


Sec. 96.360  Interim Safety Management Certificate: What is it and when 
can it be used?

    (a) A responsible person may apply for an Interim Safety Management 
Certificate when--
    (1) A responsible person takes delivery of a new U.S. vessel; or
    (2) Takes responsibility for the management of a U.S. vessel which 
is new to the responsible person or their company.
    (b) An Interim Safety Management Certificate is valid for 6 months. 
It may be issued to a U.S. vessel which meets the conditions of 
paragraph (a) of this section, when--
    (1) The company's valid Document of Compliance certificate or 
Interim Document of Compliance certificate applies to that vessel type;
    (2) The company's safety management system for the vessel includes 
the key elements of a safety management system, set out in Sec. 96.220, 
applicable to this new type of vessel;
    (3) The company's safety management system has been assessed during 
the safety management audit to issue of the Document of Compliance 
certificate or demonstrated for the issuance of the Interim Document of 
Compliance certificate;
    (4) The master and senior officers of the vessel are familiar with 
the safety management system and the planned set up arrangements;
    (5) Written documented instructions have been extracted from the 
safety management system and given to the vessel prior to sailing;
    (6) The company plans an internal audit of the vessel within three 
months; and
    (7) The relevant information from the safety management system is 
written in English, and in any other language understood by the 
vessel's personnel.


Sec. 96.370  What are the requirements for vessels of countries not 
party to Chapter IX of SOLAS?

    (a) Each foreign vessel which carries 12 or more passengers, or is 
a tanker, bulk freight vessel, freight vessel, or self-propelled mobile 
offshore drilling unit of 500 gross tons or more, operated in U.S. 
waters, under the authority of a country not a party to Chapter IX of 
SOLAS must--
    (1) Have on board valid documentation showing that the vessel's 
company has a safety management system which was audited and assessed, 
consistent with the International Safety Management Code of IMO 
Resolution A.741(18);
    (2) Have on board valid documentation from a vessel's Flag 
Administration showing that the vessel's safety management system was 
audited and assessed to be consistent with the International Safety 
Management Code of IMO Resolution A.741(18); or
    (3) Show that evidence of compliance was issued by either a 
government that is party to SOLAS or an organization recognized to act 
on behalf of the vessel's Flag Administration.
    (b) Evidence of compliance must contain all of the information in, 
and have substantially the same format as a--
    (1) Document of Compliance certificate; and
    (2) Safety Management Certificate.
    (c) Failure to comply with this section will subject the vessel to 
the compliance and enforcement procedures of Sec. 96.380 of this part.


Sec. 96.380  How will the Coast Guard handle compliance and enforcement 
of these regulations?

    (a) While operating in waters under the jurisdiction of the United 
States, the Coast Guard may board a vessel to determine that--
    (1) Valid copies of the company's Document of Compliance 
certificate and Safety Management Certificate are on board, or evidence 
of the same for vessels from countries not party to Chapter IX of 
SOLAS; and
    (2) The vessel's crew or shore-based personnel are following the 
procedures and policies of the safety management system while operating 
the vessel or transferring cargoes.
    (b) A foreign vessel that does not comply with these regulations, 
or one on which the vessel's condition or use of its safety management 
system do not substantially agree with the particulars of the Document 
of Compliance certificate, Safety Management Certificate or other 
required evidence of compliance, may be detained by order of the COTP 
or OCMI. This may occur at the port or terminal where the violation is 
found until, in the opinion of the detaining authority, the vessel can 
go to sea without presenting an unreasonable threat of harm to the 
port, the marine environment, the vessel or its crew. The detention 
order may allow the vessel to go to another area of the port, if 
needed, rather than stay at the place where the violation was found.
    (c) If any vessel that must comply with this part or with the ISM 
Code does not have a Safety Management Certificate and a copy of its 
company's Document of Compliance certificate on board, a vessel owner, 
charterer, managing operator, agent, master, or any other individual in 
charge of the vessel that is subject to this part, may be liable for a 
civil penalty under 46 U.S.C. 3318. For foreign vessels, the Coast 
Guard may request the Secretary of the Treasury to withhold or revoke 
the clearance required by 46 U.S.C. App. 91. The Coast Guard may ask 
the Secretary to permit the vessel's departure after the bond or other 
surety is filed.


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

    (a) Unless a foreign vessel is entering U.S. waters under force 
majeure, no vessel shall enter any port or terminal of the U.S. without 
a safety management system that has been properly certificated to this 
subpart if--
    (1) It is engaged in foreign trade; and
    (2) It is carrying 12 or more passengers, or a tanker, bulk freight 
vessel, freight vessel, or self-propelled mobile offshore drilling unit 
of 500 gross tons or more.
    (b) The cognizant COTP will deny entry of a vessel into a port or 
terminal under the authority of 46 U.S.C. 3204(c), to any vessel that 
does not meet the

[[Page 23721]]

requirements of paragraph (a) of this section.

Subpart D--Authorization of Recognized Organizations To Act on 
Behalf of the U.S.


Sec. 96.400  Purpose.

    (a) This subpart establishes criteria and procedures for 
organizations recognized under 46 CFR part 8, to be authorized by the 
Coast Guard to act on behalf of the U.S. The authorization is necessary 
in order for a recognized organization to perform safety management 
audits and certification functions delegated to the Coast Guard as 
described in this part.
    (b) To receive an up-to-date list of recognized organizations 
authorized to act under this subpart, send a self-addressed, stamped 
envelope and written request to the Commandant (G-MSE), 2100 Second 
Street SW., Washington, DC 20593-0001.


Sec. 96.410  Who does this subpart apply to?

    This subpart applies to all organizations seeking authorization to 
conduct safety management audits and issue international safety 
management certificates on behalf of the U.S. that are recognized under 
46 U.S.C. part 8.


Sec. 96.420  What authority may an organization ask for under this 
subpart?

    (a) An organization may request authorization to conduct safety 
management audits and to issue the following certificates:
    (1) Safety Management Certificate;
    (2) Document of Compliance certificate;
    (3) Interim Safety Management Certificate; and
    (4) Interim Document of Compliance certificate.
    (b) [Reserved]


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

    (a) A recognized organization must send a written request for 
authorization to the Commandant (G-MSE), Office of Design and 
Engineering Standards, 2100 Second Street SW, Washington, DC 20593-
0001. The request must include the following:
    (1) A statement describing what type of authorization the 
organization seeks;
    (1) Documents showing that--
    (i) The organization has an internal quality system with written 
policies, procedures and processes that meet the requirements in 
Sec. 96.440 of this part for safety management auditing and 
certification; or
    (ii) The organization has an internal quality system based on ANSI/
ASQC C9001 for safety management auditing and certification; or
    (iii) The organization has an equivalent internal quality standard 
system recognized by the Coast Guard to complete safety management 
audits and certification.
    (3) A list of the organization's exclusive auditors qualified to 
complete safety management audits and their operational area;
    (4) A written statement that the procedures and records of the 
recognized organization regarding its actions involving safety 
management system audits and certification are available for review 
annually and at any time deemed necessary by the Coast Guard; and
    (5) If the organization is a foreign classification society that 
has been recognized under 46 CFR part 8 and wishes to apply for 
authorization under this part, it must demonstrate the reciprocity 
required by 46 U.S.C. 3316, by providing with its request for 
authorization an affidavit from the government of the country in which 
the classification society is headquartered. This affidavit must 
provide a list of authorized delegations by the flag state of the 
administration of the foreign classification society's country to the 
American Bureau of Shipping, and indicate any conditions related to the 
delegated authority. If this affidavit is not received with a request 
for authorization from a foreign classification society, the request 
for authorization will be disapproved and returned by the Coast Guard.
    (b) Upon the satisfactory completion of the Coast Guard's 
evaluation of a request for authorization, the organization will be 
visited for an evaluation as described in Sec. 96.440(b) of this part.


Sec. 96.440  How will the Coast Guard decide whether to approve an 
organization's request to be authorized?

    (a) First, the Coast Guard will evaluate the organization's request 
for authorization and supporting written materials, looking for 
evidence of the following--
    (1) The organization's clear assignment of management duties;
    (2) Ethical standards for managers and auditors;
    (3) Procedures for auditor training, qualification, certification, 
and requalification that are consistent with recognized industry 
standards;
    (4) Procedures for auditing safety management systems that are 
consistent with recognized industry standards and IMO Resolution 
A.788(19);
    (5) Acceptable standards for internal auditing and management 
review;
    (6) Record-keeping standards for safety management auditing and 
certification;
    (7) Methods for reporting non-conformities and recording completion 
of remedial actions;
    (8) Methods for certifying safety management systems;
    (9) Methods for periodic and intermediate audits of safety 
management systems;
    (10) Methods for renewal audits of safety management systems;
    (11) Methods for handling appeals; and
    (12) Overall procedures consistent with IMO Resolution A.739(18), 
``Guidelines for the Authorization of Organizations Acting on Behalf of 
the Administration.''
    (b) After a favorable evaluation of the organization's written 
request, the Coast Guard will arrange to visit the organization's 
corporate offices and port offices for an on-site evaluation of 
operations.
    (c) When a request is approved, the recognized organization and the 
Coast Guard will enter into a written agreement. This agreement will 
define the scope, terms, conditions and requirements of the 
authorization. Conditions of this agreement are found in Sec. 96.460 of 
this part.


Sec. 96.450  What happens if the Coast Guard disapproves an 
organization's request to be authorized?

    (a) The Coast Guard will write to the organization explaining why 
it did not meet the criteria for authorization.
    (b) The organization may then correct the deficiencies and reapply.


Sec. 96.460  How will I know what the Coast Guard requires of my 
organization if my organization receives authorization?

    (a) Your organization will enter into a written agreement with the 
Coast Guard. This written agreement will specify--
    (1) How long the authorization is valid;
    (2) Which duties and responsibilities the organization may perform, 
and which certificates it may issue on behalf of the U.S.;
    (3) Reports and information the organization must send to the 
Commandant (G-MOC);
    (4) Actions the organization must take to renew the agreement when 
it expires; and
    (5) Actions the organization must take if the Coast Guard should 
revoke its authorization or recognition under 46 CFR part 8.
    (b) [Reserved]

[[Page 23722]]

Sec. 96.470  How does the Coast Guard terminate an organization's 
authorization?

    At least every 12 months, the Coast Guard evaluates organizations 
authorized under this subpart. If an organization fails to maintain 
acceptable standards, the Coast Guard may terminate that organization's 
authorization, remove the organization from the Commandant's list, and 
further evaluate the organization's recognition under 46 CFR part 8.


Sec. 96.480  What is the status of a certificate if the issuing 
organization has its authority terminated?

    Any certificate issued by an organization authorized by the Coast 
Guard whose authorization is later terminated remains valid until--
    (a) Its original expiration date,
    (b) The date of the next periodic audit required to maintain the 
certificate's validity, or
    (c) whichever of paragraphs (a) or (b) of this section occurs 
first.


Sec. 96.490  What further obligations exist for an organization if the 
Coast Guard terminates its authorization?

    The written agreement by which an organization receives 
authorization from the Coast Guard places it under certain obligations 
if the Coast Guard revokes that authorization. The organization agrees 
to send written notice of its termination to all responsible persons, 
companies and vessels that have received certificates from the 
organization. In that notice, the organization must include--
    (a) A written statement explaining why the organization's 
authorization was terminated by the Coast Guard;
    (b) An explanation of the status of issued certificates;
    (c) A current list of organizations authorized by the Coast Guard 
to conduct safety management audits; and
    (d) A statement of what the companies and vessels must do to have 
their safety management systems transferred to another organization 
authorized to act on behalf of the U.S.


Sec. 96.495  How can I appeal a decision made by an authorized 
organization?

    (a) A responsible person may appeal a decision made by an 
authorized organization by mailing or delivering to the organization a 
written request for reconsideration. Within 30 days of receiving your 
request, the authorized organization must rule on it and send you a 
written response. They must also send a copy of their response to the 
Commandant (G-MOC).
    (b) If you are not satisfied with the organization's decision, you 
may appeal directly to the Commandant (G-MOC). You must make your 
appeal in writing, including any documentation and evidence you wish to 
be considered. You may ask the Commandant (G-MOC) to stay the effect of 
the appealed decision while it is under review.
    (c) The Commandant (G-MOC) will make a decision on your appeal and 
send you a response in writing. That decision will be the final Coast 
Guard action on your request.

PART 2--VESSEL INSPECTIONS

    2. Revise the authority citation for part 2 to read as follows:

    Authority: 33 U.S.C. 1903; 43 U.S.C. 1333; 46 U.S.C. 3103, 3205, 
3306, 3703; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; 49 
CFR 1.46; Subpart 2.45 also issued under the authority of Act of 
Dec. 27, 1950, Ch. 1155, secs. 1, 2, 64 Stat 1120 (see 46 U.S.C. 
App. note prec.1).

    3. In Sec. 2.01-25, add paragraph (a)(1)(ix) and revise paragraph 
(a)(2) to read as follows:


Sec. 2.01-25  International Convention for Safety of Life at Sea, 1974.

    (a) * * *
    (1) * * *
    (ix) Safety Management Certificate.
    (2) The U.S. Coast Guard will issue through the Officer In Charge, 
Marine Inspection, the following certificates after performing an 
inspection or safety management audit of the vessel's systems and 
determining the vessel meets the applicable requirements:
    (i) Passenger Ship Safety Certificate.
    (ii) Cargo Ship Safety Construction Certificate except when issued 
to cargo ships by a Coast Guard recognized classification society at 
the option of the owner or agent.
    (iii) Cargo Ships Safety Equipment Certificate.
    (iv) Exemption Certificate
    (v) Nuclear Passenger Ship Safety Certificate.
    (vi) Nuclear Cargo Ship Safety Certificate.
    (vii) Safety Management Certificate, except when issued by a 
recognized organization authorized by the Coast Guard.
* * * * *

PART 31--INSPECTION AND CERTIFICATION

    4. Revise the authority citation for part 31 to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3205, 3306, 3703; 
49 U.S.C. 5103, 5106; E.O. 12234; 45 FR 58801; 3 CFR, 1980 Comp., p. 
277; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; 49 CFR 
1.46. Section 31.10-21 also issued under the authority of Sec. 4109, 
Pub. L. 101-380, 104 Stat. 515.

    5. Add Sec. 31.40-30 to read as follows:


Sec. 31.40-30  Safety Management Certificate--T/ALL.

    (a) All tankships on an international voyage must have a valid 
Safety Management Certificate and a copy of their company's valid 
Document of Compliance certificate on board.
    (b) All such tankships must meet the applicable requirements of 33 
CFR part 96.
    6. In Sec. 31.40-40, revise paragraph (b) to read as follows:


Sec. 31.40-40  Duration of Convention certificates---T/ALL.

* * * * *
    (b) A Cargo Ship Safety Construction Certificate and a Safety 
Management Certificate shall be issued for a period of not more than 60 
months.
* * * * *

PART 71--INSPECTION AND CERTIFICATION

    7. Revise the authority citation for part 71 to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2113, 3205, 3306; E.O. 
12234, 45 FR 58801; 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 
54757, 3 CFR, 1991 Comp., p. 351; 49 CFR 1.46.

    8. Add Sec. 71.75-13 to read as follows:


Sec. 71.75-13  Safety Management Certificate.

    (a) All vessels on an international voyage must have a valid Safety 
Management Certificate and a copy of their company's valid Document of 
Compliance certificate on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    9. In Sec. 71.75-20, revise paragraph (a) to read as follows:


Sec. 71.75-20  Duration of certificates.

    (a) The certificates are issued for a period of not more than 12 
months, with exception to a Safety Management Certificate which is 
issued for a period of not more than 60 months.
* * * * *

PART 91---INSPECTION AND CERTIFICATION

    10. Revise the authority citation for part 91 to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 3205, 3306; E.O. 12234; 
45 FR 58801; 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 54757, 3 
CFR, 1991 Comp., p. 351; 49 CFR 1.46.

    11. Add Sec. 91.60-30 to read as follows:


Sec. 91.60-30  Safety Management Certificate.

    (a) All vessels on an international voyage must have a valid Safety

[[Page 23723]]

Management Certificate and a copy of their company's valid Document of 
Compliance certificate on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    12. In Sec. 91.60-40, revise paragraph (b) to read as follows:


Sec. 91.60-40  Duration of certificates.

* * * * *
    (b) A Cargo Ship Safety Construction Certificate and a Safety 
Management Certificate are issued for a period of not more than 60 
months.
* * * * *

PART 107--INSPECTION AND CERTIFICATION

    13. Revise the authority citation for part 107 to read as follows:

    Authority: 43 U.S.C. 1333; 46 U.S.C. 3205, 3306, 5115; 49 CFR 
1.45, 1.46; Sec. 107.05 also issued under the authority of 44 U.S.C. 
3507.

    14. Add Sec. 107.415 to read as follows:


Sec. 107.415  Safety Management Certificate.

    (a) All self-propelled mobile offshore drilling units of 500 gross 
tons or over on an international voyage must have a valid Safety 
Management Certificate and a copy of their company's valid Document of 
Compliance certificate on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    (c) A Safety Management Certificate is issued for a period of not 
more than 60 months.

PART 115--INSPECTION AND CERTIFICATION

    15. Revise the authority citation for part 115 to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3205, 3306; 49 
U.S.C. App. 1804; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp., 
p. 743; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; 49 CFR 
1.46.

    16. Add Sec. 115.925 to read as follows:


Sec. 115.925  Safety Management Certificate.

    (a) All vessels that carry more than 12 passengers on an 
international voyage must have a valid Safety Management Certificate 
and a copy of their company's valid Document of Compliance certificate 
on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    (c) A Safety Management Certificate is issued for a period of not 
more than 60 months.

PART 126--INSPECTION AND CERTIFICATION

    17. Revise the authority citation for part 126 to read as follows:

    Authority: 46 U.S.C. 3205, 3306; 33 U.S.C. 1321(j); E.O. 11735, 
38 FR 21243, 3 CFR, 1971-1975 Comp., p. 793; 49 CFR 1.46.

    18. Add Sec. 126.480 to read as follows:


Sec. 126.480  Safety Management Certificate.

    (a) All offshore supply vessels of 500 gross tons or over on 
international voyages must have a valid Safety Management Certificate 
and a copy of their company's valid Document of Compliance certificate 
on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    (c) A Safety Management Certificate is issued for a period of not 
more than 60 months.

PART 175--GENERAL PROVISIONS

    19. Revise the authority citation for part 175 to read as follows:

    Authority: 46 U.S.C. 2103, 3205, 3306, 3703; 49 U.S.C. App. 
1804; 49 CFR 1.45, 1.46; 175.900 also issued under authority of 44 
U.S.C. 3507.

    20. In Sec. 175.540, add paragraph (d) to read as follows:


Sec. 175.540  Equivalents

* * * * *
    (d) The Commandant may accept alternative compliance arrangements 
in lieu of specific provisions of the International Safety Management 
(ISM) Code (IMO Resolution A.741(18)) for the purpose of determining 
that an equivalent safety management system is in place on board a 
vessel. The Commandant will consider the size and corporate structure 
of a vessel's company when determining the acceptability of an 
equivalent system. Requests for determination of equivalency must be 
submitted to Commandant (G-MOC) via the cognizant OCMI.

PART 176--INSPECTION AND CERTIFICATION

    21. Revise the authority citation for part 176 to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3205, 3306; 49 
U.S.C. App. 1804; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp., 
p. 793; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; 49 CFR 
1.46.

    22. Add Sec. 176.925 to read as follows:


Sec. 176.925  Safety Management Certificate.

    (a) All vessels that carry more than 12 passengers on an 
international voyage must have a valid Safety Management Certificate 
and a copy of their company's valid Document of Compliance certificate 
on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    (c) A Safety Management Certificate is issued for a period of not 
more than 60 months.
    23. Revised Sec. 176.930 to read as follows:


Sec. 176.930  Equivalents.

    As outlined in Chapter I (General Provisions) Regulation 5, of 
SOLAS, the Commandant may accept an equivalent to a particular fitting, 
material, apparatus, or any particular provision required by SOLAS 
regulations if satisfied that such equivalent is at least as effective 
as that required by the regulations. An owner or managing operator of a 
vessel may submit a request for the acceptance of an equivalent 
following the procedures in Sec. 175.540 of this chapter. The 
Commandant will indicate the acceptance of an equivalent on the 
vessel's SOLAS Passenger Ship Safety Certificate or Safety Management 
Certificate, as appropriate.

PART 189--INSPECTION FOR CERTIFICATION

    24. Revise the authority citation for part 189 to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2113, 3205, 3306; E.O. 
12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 
54757, 3 CFR, 1991 Comp., p. 351; 49 CFR 1.46.

    25. Add Sec. 189.60-30 to read as follows:


Sec. 189.60-30  Safety Management Certificate.

    (a) All vessels on an international voyage must have a valid Safety 
Management Certificate and a copy of their company's valid Document of 
Compliance certificate on board.
    (b) All such vessels must meet the applicable requirements of 33 
CFR part 96.
    26. In Sec. 189.60-40, revise paragraph (b) to read as follows:


Sec. 189.60-40  Duration of certificates.

* * * * *
    (b) A Cargo Ship Safety Construction Certificate and a Safety 
Management Certificate are issued for a period of not more than 60 
months.
* * * * *

[[Page 23724]]

    Dated: April 23, 1997.
J.C. Card,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety 
and Environmental Protection.
[FR Doc. 97-11189 Filed 4-30-97; 8:45 am]
BILLING CODE 4910-14-P