By adopting a model of commitment, strategy and execution, compliance can be an achievable goal.
Compliance is essential to profitability in the maritime industry. The effect of compliance on profitability used to be indirect. It was not that it helped companies make money, but it was essential in keeping them from going broke. But compliance with safety, security and environmental issues has become so paramount that a company whose compliance level has risen to the point of excellence can have a distinct advantage over competitors in the marketplace. Management of compliance is of critical importance, not only to the bottom line, but also to avoid personal liability and prosecution.
For maritime companies without a compliance program, it has become common practice to rely primarily upon the opinions of individual Coast Guard inspectors regarding regulatory compliance issues, despite occasionally receiving inconsistent guidance. The only way to ensure compliance is to manage it. In fact, it is the owner’s and/or operator’s responsibility to do so.
Having a successful compliance program in today’s highly regulated world is no easy task. However, despite all of the regulations placed upon the industry, compliance is an achievable and worthy goal. A culture of compliance can be achieved as long as we have the commitment to full compliance on all levels, a strategy on how to get in compliance and stay in compliance, and the strong leadership and management skills required to ensure the execution of that strategy.
True commitment requires awareness, acceptance and a thorough understanding of the intent of the regulations.
Awareness: Awareness is the first component to maritime compliance management. A company cannot comply with regulations if it is not aware of them. Simply keeping on top of all the regulations and changes is a difficult task, but a company cannot afford not to be aware of regulations. Once a company becomes aware of a regulation, the first step should be to review the applicability in the regulation and ensure that it applies to the company and that there are no exceptions.
Acceptance: Sometimes, even if we are aware, certain regulations can be difficult to accept. For example, it is now a requirement for most vessel owners to manage rain runoff. Some regulations seem so ridiculous that vessel owners have a hard time believing that they could be true, that they will ever be enforced or that someone won’t come to their senses and make them go away.
A common strategy used, once a vessel owner becomes aware of a regulation, is to call around to some friendly competitors to see what they are doing. They may end up convincing each other to adopt a wait-and-see approach, assuming that the Coast Guard always gives 30 days to correct a deficiency. Acceptance is where the company management “buy-in” discussion has its roots. If a company is having trouble getting captains to be proactive about compliance issues, it should examine its overall attitude toward regulations.
Understanding: Some say regulations are written in blood. To have an effective compliance program, there must be an understanding of the intent of the regulations. Policy guidance should be reviewed to get a full understanding of the topic. Additionally, the Federal Register has explanations for the regulations as well as public comments and the Coast Guard’s responses. This provides excellent insight into the intent of the regulations and is useful when faced with a complicated regulatory issue where the answer is not obvious. The best way to determine the correct course of action is to consider the intent of the regulation.
The best strategy for regulatory compliance is to prepare for the worst and hope for the best.
Management Systems: To ensure compliance with prescriptive regulations, comprehensive job aids should be used. It is preferable if the job aids are the same as those used by the U.S. Coast Guard (USCG), such as a CG840 book for a particular type of vessel or the USCG/EPA Vessel General Permit enforcement guidance, all of which are available to the public. The best way to avoid costly delays and compliance errors is to know what to expect, be prepared for the inspections and know how to respond to inspectors.
For compliance with performance or management based regulations, plans and procedures must reflect reality and be fully implemented, or they can lead to significant fines and be used against the company during litigation. There is an art to writing manuals and plans designed to prove compliance with safety, security and environmental regulations. They can be insufficient, or over the top, depending on the level of understanding and experience of the drafter. The key to success is to find the “optimum level of compliance” and be able to defend it over time.
Manuals such as safety management systems (SMS) must be customized for vessels and crews. Companies begin at a disadvantage when they buy very large manuals off the shelf full of checklists and forms instead of engaging their crews and going through a risk assessment process to determine which operations require written procedures and which ones don’t, which operations require a checklist and which ones don’t and which operations require work permits and which ones don’t, all while bearing in mind the intent of the regulations, which is to minimize human error by following written procedures balanced with the realities of operating a vessel.
Training: Crews must not only be thoroughly trained on how to conform, but they must also understand why. If the purpose or intent is not understood, even the most conscientious will falter.
Motivation: Training alone is not always sufficient. The captain is the master of the vessel. Captains must be motivated to take command of their vessels, not to simply drive the boat. Captains should be required to fully read and understand all company plans and manuals that pertain to vessel operations and take full responsibility for them. Captains should be empowered to train subordinates and delegate duties to qualified crewmembers as they see fit. Incentive programs should be designed to incentivize the level of responsibility required from the captain and crew for the program to be a success.
Many companies make it this far but fail at execution. It is the most difficult part because it involves hard work that cannot be easily outsourced. Proper execution involves oversight and discipline as well as measurement and continuous improvement.
Oversight: With few exceptions, the level of implementation is consistent with the level of oversight. The compliance management program will not work if it is placed on a boat and never reviewed by company personnel. The company must ensure it is being done, and done correctly, at all times.
Discipline: Discipline is essential. In order for some individuals to comply, they must perceive some negative consequence to themselves for noncompliance. For many, the threat of the company being fined or the vessel being detained is insufficient. Consequences must be personal, such as the loss of a job, a personal fine or imprisonment. Companies should enforce strict disciplinary procedures. Without personal consequences for individuals, there will not be full compliance or conformance.
Continuous Improvement: Finally, methods should be derived to measure the effectiveness of the program while looking to the crews to provide input in the spirit of continuous improvement.
Compliance is a worthy and achievable goal. As long as a company has the commitment to see it through, a strategy on how to do it, and the leadership and management skills to ensure full execution of the strategy, it will gain the peace of mind that it is implementing a truly compliant program.
The author is a maritime industry consultant for Maritime Compliance International LLC (www.maritimecomplianceinternational.com), New Orleans, and can be reached at firstname.lastname@example.org.