The NMSC Guidelines for The NMSC Guidelines for Assessing the Application of Assessing the Application of the NSCV to Existing Vesselsthe NSCV to Existing Vessels

Mori Flapan Principal Technical AdvisorNational Marine Safety Committee Inc.

““What’s to be doneWhat’s to be done with grand-dad?”with grand-dad?”

GrandfatheringGrandfathering

Permitting existing vessels to operate to Permitting existing vessels to operate to standards that predate current minimum standards that predate current minimum

standardsstandards

Issues with the concept of Issues with the concept of grandfatheringgrandfathering

1.1. Perception that grandfathered vessels are Perception that grandfathered vessels are substandard compared to modern vesselssubstandard compared to modern vessels

2.2. Does not represent reality in that there are Does not represent reality in that there are no fully grandfathered vesselsno fully grandfathered vessels

3.3. Grandfathering can be in tension with public Grandfathering can be in tension with public expectations regarding safetyexpectations regarding safety

4.4. Grandfathering is inconsistently applied Grandfathering is inconsistently applied between jurisdictions and within jurisdictionsbetween jurisdictions and within jurisdictions

5.5. Lack of consistent policy leads to interstate Lack of consistent policy leads to interstate transfer being used as a de-facto standardtransfer being used as a de-facto standard

What are the objectives of new What are the objectives of new standards?standards?

New standards should be seen as the New standards should be seen as the vision for the fleet in 20 years timevision for the fleet in 20 years time

A vessel considered A vessel considered sufficiently safe today is not sufficiently safe today is not automatically “unsafe” the automatically “unsafe” the next day because of the next day because of the adoption of a new standardadoption of a new standard

New standards are developed and justified on a New standards are developed and justified on a cost/benefit basis assuming the vessel is a cost/benefit basis assuming the vessel is a new vesselnew vessel

Assumptions differ for existing vesselsAssumptions differ for existing vessels

The cost/benefit analysis that underpins the The cost/benefit analysis that underpins the standards for new vessels will not be properly standards for new vessels will not be properly applicable to existing vessels applicable to existing vessels

While benefits stay the same, costs for While benefits stay the same, costs for existing vessels to comply are almost always existing vessels to comply are almost always moremore

Costs higher for existing vesselsCosts higher for existing vessels

As well as the direct cost of complying with a As well as the direct cost of complying with a requirement, the following additional costs ariserequirement, the following additional costs arise——- Cost of removal of existing arrangementsCost of removal of existing arrangements- Writing off the capital investment of Writing off the capital investment of

existing arrangementsexisting arrangements- Alterations to structure and systems Alterations to structure and systems

to accommodate new arrangementsto accommodate new arrangements- Lost earnings during alterationsLost earnings during alterations- Resultant changes in earning capacityResultant changes in earning capacity

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Coverage of risk

Co

st

Cost of safety measures

Cost of accidents

Safety measure cost v accidentSafety measure cost v accidentcost saving balancecost saving balance

Co

st o

f ac

cid

ents

Co

st o

f ac

cid

ents

New vessels

NS

CV

NS

CV

Safety cost v. accident cost

balance

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Coverage of risk

Co

st

Cost of accidents

Safety measure cost v accidentSafety measure cost v accidentcost saving balancecost saving balance

Co

st o

f ac

cid

ents

Co

st o

f ac

cid

ents

Safety cost v. accident cost

balance

Existing vessels

Safety cost v. accident cost

balance

Existing vessel cost of new safety

measures

NS

CV

NS

CV

Old

sta

nd

ard

Old

sta

nd

ard

New

But is this the end of the story?But is this the end of the story?

New standards reflect New standards reflect changes in public changes in public expectationsexpectations

Some new provisions Some new provisions may be urgentmay be urgent

OH&S has no OH&S has no grandfather provisionsgrandfather provisions

Community expectationsCommunity expectations

Admiral NakhimovAdmiral Nakhimovcollision 1986collision 1986423 fatalities423 fatalities

MarquesMarquescapsize 1984capsize 198419 fatalities19 fatalities

KarrabeeKarrabeesinks 1984sinks 1984

iconic ferries iconic ferries withdrawn in 2 withdrawn in 2

yearsyears

ExcaliburExcaliburkeel failure 2002keel failure 2002

4 fatalities4 fatalitiesManslaughterManslaughter

chargescharges

Herald of Free Enterprise – 1993Herald of Free Enterprise – 1993

Capsized causing193 fatalities Corporate manslaughter Ro-Ro flooding reforms needed

Introduced retrospective application

EstoniaEstoniafoundered 1994 foundered 1994

with 900+ fatalitieswith 900+ fatalities

OH&S versus SurveyOH&S versus Survey

Both safety regimes operate at different levelsBoth safety regimes operate at different levels COAG Guidelines apply a cost-benefit rule COAG Guidelines apply a cost-benefit rule

““government action is only justified where there government action is only justified where there areare positive net social benefits.. positive net social benefits..””

OH&S requires OH&S requires reasonably practicablereasonably practicable steps to steps to eliminate or minimise riskseliminate or minimise risks

ALARP principle “as low as reasonably ALARP principle “as low as reasonably practicable” suggests steps are reasonable practicable” suggests steps are reasonable unless there is a unless there is a ““gross disproportion between gross disproportion between benefit and costbenefit and cost - the risk being insignificant in - the risk being insignificant in relation to the sacrifice”relation to the sacrifice”

Increasing level of safety

Req’d minimum standard

increased safety

gap

safety gapReq’d

minimum standard

Exemptionstill leaves

OH&S obligation

Total lack of safety

Risk as low as reasonably practicable ALARPRisk as low as reasonably practicable ALARP

OH&S and GrandfatheringOH&S and Grandfathering

OH&S obligation

OH&S obligation

National standard

for commercial

vessels

OH&S obligation

Old grand-father

standardConditions of

exemption

Industry cannot keep head in sandIndustry cannot keep head in sand

Need to find a way to facilitate Need to find a way to facilitate existing vessels including Museum existing vessels including Museum vessels keeping pace with long-vessels keeping pace with long-term community expectationsterm community expectations

NSCV sets the minimum NSCV sets the minimum safety benchmarks for the safety benchmarks for the fleet in the futurefleet in the future

One means to help overcomeOne means to help overcomethe problem is to provide the problem is to provide adequate adequate time for transitiontime for transition

Why time helps reduce Why time helps reduce cost for existing vesselscost for existing vessels

Allows return on existing Allows return on existing capital investmentcapital investment

Permits residual value to be Permits residual value to be progressively written offprogressively written off

Allows cost to be partially offset by ongoing Allows cost to be partially offset by ongoing repairs, refits and refurbishmentsrepairs, refits and refurbishments

Permits scheduling to best accommodate Permits scheduling to best accommodate business needsbusiness needs

Allows the owner to make a decision on Allows the owner to make a decision on whether to either comply or scrap & replacewhether to either comply or scrap & replace

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Coverage of risk

Co

st

Cost of accidents

Safety measure cost v accidentSafety measure cost v accidentcost saving balancecost saving balance

Co

st o

f ac

cid

ents

Co

st o

f ac

cid

ents

Safety cost v. accident cost

balance

Existing vessels with time

Safety cost v. accident cost

balance

NS

CV

NS

CV

Existing vessel cost after passing

of time

Existing w/o time New

Addressing the problemAddressing the problem

Provides principles for developing Provides principles for developing legislation and modifying the standards legislation and modifying the standards

Guidelines not mandatory in themselvesGuidelines not mandatory in themselves They specify that NSCV provisions be They specify that NSCV provisions be

reviewed clause by clause to establish reviewed clause by clause to establish relevance of each change to the safety relevance of each change to the safety of existing vesselsof existing vessels

Guidelines for Assessing the Application Guidelines for Assessing the Application of the NSCV to Existing Vesselsof the NSCV to Existing Vessels

1.1. Urgent statusUrgent status

Where:Where: the matter has an immediate and the matter has an immediate and

significant impact on safety; orsignificant impact on safety; or there is a manifest deficiency in the there is a manifest deficiency in the

safety standard of the existing fleet safety standard of the existing fleet which has been highlighted by an which has been highlighted by an incident, product recall or similar eventincident, product recall or similar event

2. Benign status2. Benign status

Where:Where: the benefits would be the benefits would be

grossly disproportionate grossly disproportionate to the costs; orto the costs; or

the change is for largely administrative, the change is for largely administrative, industry efficiency, or other non-safety industry efficiency, or other non-safety related reasonsrelated reasons

3. Progressive status3. Progressive status

These are assigned times for transition These are assigned times for transition intended to minimise the impact on business intended to minimise the impact on business while achieving long term safety goalswhile achieving long term safety goals

Where there would be a deficiency Where there would be a deficiency in long term safety expectations, in long term safety expectations, but the deficiency is not but the deficiency is not considered to create an immediate considered to create an immediate and significant impact on safety and significant impact on safety

Status determines transition timeStatus determines transition time

Provision status

Typical example Typical transition time

UrgentUrgent Ro-Ro VesselsRo-Ro Vessels 2 to 3 years2 to 3 years

BenignBenign Hull scantlingsHull scantlings Never requiredNever required

ProgressiveProgressive

Quantity of LSEQuantity of LSE

DDesign of LSEesign of LSE

Mass of personsMass of persons

Subdivision Subdivision

1 to 2 years1 to 2 years

5 to 10 years5 to 10 years

10 years10 years

20 years20 years

Guidelines provide for flexible Guidelines provide for flexible approaches to complianceapproaches to compliance

Under the NSCV, requirements may be met by Under the NSCV, requirements may be met by applying— applying—

1.1. the specified the specified deemed-to-satisfy solutiondeemed-to-satisfy solution;;

2.2. an an equivalent solutionequivalent solution, but only where , but only where where the safety outcome is equivalentwhere the safety outcome is equivalent

The Guidelines facilitate even greater flexibility The Guidelines facilitate even greater flexibility in solution by providing for a third option—in solution by providing for a third option—

3.3. a so-called a so-called remedial solutionremedial solution

Remedial solutionsRemedial solutions

Allow for solutions that are not fully Allow for solutions that are not fully equivalent, but can deliver most of the safety equivalent, but can deliver most of the safety gains of the deemed-to-satisfy solution at a gains of the deemed-to-satisfy solution at a more practicable cost more practicable cost

Particularly relevant to Particularly relevant to museum vessels museum vessels because the ‘cost’ because the ‘cost’ may be the loss of may be the loss of authenticity and/or authenticity and/or originalityoriginality

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Coverage of risk

Co

st

Cost of accidents

Safety measure cost v accidentSafety measure cost v accidentcost saving balancecost saving balance

Co

st o

f ac

cid

ents

Co

st o

f ac

cid

ents

Safety cost v. accident cost

balance

Existing vessels with time

NS

CV

NS

CV

Existing vessel cost after passing

of time

Mo

dif

ied

Mo

dif

ied

NS

CV

NS

CV

Existing w/o time New

Increasing level of safety

Req’d minimum standard

Reduced gap

safety gapReq’d

minimum standard

Total lack of safety

Risk as low as reasonably practicable ALARPRisk as low as reasonably practicable ALARP

Effect of remedial solutionsEffect of remedial solutions

OH&S obligation

OH&S obligation

National standard

for commercial

vessels

OH&S obligation

Old grand-father

standard

Existing vessel

modified by remedial solutions

Application to a vesselApplication to a vessel

1.1. Identify nature and extent NSCV Identify nature and extent NSCV requirements to be applied to the requirements to be applied to the existing vesselexisting vessel

2.2. Establish extent to which vessel meets Establish extent to which vessel meets or fails to fulfil requirementsor fails to fulfil requirements

Application to a vesselApplication to a vessel

3.3. Consider ways of controlling risks by Consider ways of controlling risks by means of a means of a deemed-to-satisfydeemed-to-satisfy or or equivalent solutionsequivalent solutions

4.4. If step 3. is not practicable, identify if If step 3. is not practicable, identify if majority of risk can be mitigated by a majority of risk can be mitigated by a remedial solutionremedial solution

5.5. Negotiate with the Authority regarding Negotiate with the Authority regarding the application of a remedial solutionthe application of a remedial solution

Implications of guidelines for Implications of guidelines for museum vessels museum vessels

Safety will always be a challenge for Safety will always be a challenge for operational operational museummuseum vessels vessels

Museums are limited in their options due Museums are limited in their options due to their commitment to preservation and to their commitment to preservation and authenticity authenticity

A modified NSCV for application to A modified NSCV for application to existing vessels will assist Museums to existing vessels will assist Museums to identify and prioritise safety issuesidentify and prioritise safety issues

Remedial solutions provide Museums Remedial solutions provide Museums with broader options for responseswith broader options for responses

Example: Example: Field of vision from helm Field of vision from helm

NSCV will have required minimum standards for NSCV will have required minimum standards for operator’s view from the helmoperator’s view from the helm

Guidelines will establish priority status of provisionGuidelines will establish priority status of provision Some museum vessels may not meet the deemed-Some museum vessels may not meet the deemed-

to-satisfy standard without major reconstructionto-satisfy standard without major reconstruction Remedial solution might be to have a trained Remedial solution might be to have a trained

lookout with walkie-talkie; or helmsman in addition lookout with walkie-talkie; or helmsman in addition to masterto master

Can warnings help?Can warnings help?

NSW Civil Liability Act 2002 No 22NSW Civil Liability Act 2002 No 22

5M No duty of care for recreational activity where risk warning(1) A person (the defendant) does not owe a duty of care to another person who engages in a recreational activity (the plaintiff) to take care in respect of a risk of the activity if the risk was the subject of a risk warning to the plaintiff.

Voluntary assumption of riskVoluntary assumption of risk

The legislation suggests that the safety gap The legislation suggests that the safety gap on Museum vessels can be reduced by on Museum vessels can be reduced by modifying community expectations as to the modifying community expectations as to the presence of riskpresence of risk

WARNINGWARNING

PERSONS TRAVEL ON THIS VESSEL AT THEIR PERSONS TRAVEL ON THIS VESSEL AT THEIR OWN RISK OWN RISK

THIS MUSEUM VESSEL HAS BEEN CERTIFIED TO THIS MUSEUM VESSEL HAS BEEN CERTIFIED TO OPERATE FOR THE PURPOSE OF HISTORY OPERATE FOR THE PURPOSE OF HISTORY

EDUCATION AND DOES NOT MEET THE SAME EDUCATION AND DOES NOT MEET THE SAME SAFETY STANDARDS AS A NORMAL SAFETY STANDARDS AS A NORMAL COMMERCIAL PASSENGER VESSELCOMMERCIAL PASSENGER VESSEL

Voluntary Voluntary assumption assumption

of risk?of risk?

Increasing level of safety

Req’d minimum standard

Total lack of safety

Risk as low as reasonably practicable ALARPRisk as low as reasonably practicable ALARP

Can Civil Liability legislation help?Can Civil Liability legislation help?

OH&S obligation

OH&S obligation

National standard

for commercial

vessels

Old grand-father

standard

OH&S obligation

Existing vessel

modified by remedial solutions

But does OH&S still

apply?

QUESTIONS?QUESTIONS?www.nmsc.gov.auwww.nmsc.gov.au

mflapan@nmsc.gov.aumflapan@nmsc.gov.au

Phone—02 9247 2124Phone—02 9247 2124