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De-mystifying the targeting process for Port State Control exams

May 2, 2017 11:26 AM
Chief Petty Officer Mark Henricksen and Petty Officer 3rd Class Danielle Montez conduct a safety examination aboard the Liberian-flagged containership MSC Vaishnavi R. on Feb. 6 in Boston. Risk assessment matrices play a principal role in determining which ships to select for PSC exams.

Courtesy U.S. Coast Guard

Chief Petty Officer Mark Henricksen and Petty Officer 3rd Class Danielle Montez conduct a safety examination aboard the Liberian-flagged containership MSC Vaishnavi R. on Feb. 6 in Boston. Risk assessment matrices play a principal role in determining which ships to select for PSC exams.

The U.S. Coast Guard’s Port State Control (PSC) program is intended to ensure that foreign-flagged vessels operating in U.S. waters comply with applicable international conventions and U.S. regulations, with the ultimate goal of identifying and eliminating substandard ships from U.S. waters. To promote efficiency and minimize the unnecessary expenditure of time, energy and, yes, money by both the Coast Guard and the regulated industry, the Coast Guard utilizes risk-assessment matrices and other criteria to prioritize the vessels it targets for PSC exams. As these exams can result in costly and disruptive control measures for non-compliant vessels, up to and including expulsion from port or an International Maritime Organization (IMO) detention, shipowners, operators, managers and charterers would be well served to understand the Coast Guard’s process for determining which vessels it targets for PSC exams.

The principal tools the Coast Guard utilizes to determine which vessels to target for PSC exams are risk-assessment matrices — one focused on safety and environmental protection, and the other on vessel security. 

In the first matrix, the Coast Guard looks at safety- or environmental-related factors in five categories and assigns points based on how the vessel “performs” in each category. The five categories are the vessel’s management (owner, operator, et al.), the performance of the vessel’s flag state, the performance of the vessel’s recognized organization (i.e. classification society), the vessel’s compliance history and the vessel’s inherent characteristics (age, type, etc.). 

The worse a vessel scores in each category, the more points it is assigned. The more points a vessel accumulates, the more likely it is to be targeted for a safety and environmental compliance PSC exam. For example, a vessel that scores 17 or more points through application of the matrix is designated as Priority I; for such a vessel, port entry may be restricted until the Coast Guard examines the vessel. A vessel that scores between 7 and 16 points is considered a Priority II vessel; for it, cargo operations or passenger embarkation/debarkation typically will be restricted if the sector commander/captain of the port (COTP) determines that the vessel poses a safety or environmental risk to the port. Vessels assigned less than 7 points through utilization of the matrix are considered non-priority vessels, since they pose a low safety and environmental risk to the port.

This matrix, though an important and useful tool, is not the sole means of determining whether a vessel will be targeted for a safety and environmental compliance PSC exam. Vessels involved in a marine casualty that may have affected seaworthiness, a vessel that a Coast Guard COTP determines poses a potential hazard to the port or the environment, or vessels whose classification society has a detention ratio equal to or greater than 2 percent are all considered Priority I vessels, regardless of their matrix score. Ships with outstanding requirements from a previous examination in any U.S. port that require clearing are considered Priority II vessels, as are vessels that have not been examined within the past 12 months. Finally, any vessel may be randomly selected for a safety and environmental compliance PSC exam regardless of its compliance history or performance.

The second matrix the Coast Guard uses is for determining which vessels to target for security PSC exams. Four security-related categories of information — ship management, flag state, recognized security organization performance and the vessel’s security compliance history — are examined to guide the Coast Guard in deciding whether to do a security PSC exam. Previously, the Coast Guard also considered a vessel’s port-of-call history, but that category will no longer be part of the decision-making process in the vessel security matrix. This change will be reflected in the 2016 PSC annual report, which will be issued in spring 2017.

As with the safety and environmental compliance matrix, poorer vessel performance in the categories of interest will increase the likelihood of a vessel being targeted for a security PSC exam. Vessels scoring 17 points or higher will be considered Priority I International Ship and Port Facility Security (ISPS) vessels, and will be examined at sea prior to entering port. Vessels scoring 7 to16 points are considered ISPS II vessels and will be examined in port. Vessels scoring below 7 points are considered ISPS III vessels and will not receive a security exam, unless randomly selected to do so.

As with the safety and environmental compliance process, the matrix score is not the sole means of determining a vessel’s priority status, and thus its susceptibility to receive a security exam. A vessel will be designated ISPS I if its recognized security organization has had three or more major control actions in the past 12 months, or if the vessel has had an ISPS-related denial of entry or expulsion from port in the past 12 months. A vessel will be designated ISPS II if it has had a new owner or flag state since its last exam, or if it has not had an ISPS compliance exam within the past 12 months (assuming the vessel is not designated ISPS I through application of the matrix or for one of the other reasons discussed above).

PSC exams, and the negative consequences that can result, can be very costly and disruptive to shipowners and operators. Administrative consequences include denial of entry or expulsion, detainment, COTP orders, customs hold, restrictions of operations or vessel movement, delay, a comprehensive security inspection, a letter of deviation, flag-state notification, and lesser administrative/corrective measures. The vessel’s owners or operators may be subject to significant fines for violations of applicable safety, environmental or security regulations. Criminal prosecutions, which can result in crippling fines, onerous environmental monitoring programs and other devastating consequences to shipowners and operators, are increasingly being seen, particularly in cases involving fraud and deceit during the course of a PSC exam.

Shipowners and operators can engage in extensive self-help measures to minimize the cost, inconvenience and collateral consequences of a PSC exam. These include the following:

• Ensuring that internal processes are in place aboard their vessels to promote compliance with applicable international safety, environmental protection and security standards.  

• Carefully selecting entities associated with the vessel — the flag state, classification society and recognized security organization. A poor choice in any of these realms can lead to an increased likelihood of receiving a PSC exam, with all of the negative consequences that could stem from it.  

• Investing in preventive external compliance audits that can result in the identification of issues upfront, allowing them to be rectified before they are discovered in a PSC exam.  

• Retaining the services of compliance specialists if faced with the negative consequences of a PSC exam or any other PSC action. The specialists can work to reduce the severity of the imposed control action.

• Accessing the Coast Guard’s PSC website, www.uscg.mil/hq/cgcvc/cvc2/psc/, which contains some extraordinarily useful information on the topic of Port State Control exams. Particularly useful are the PSC annual reports, which contain the matrices referred to in this article. These reports provide statistics that, among other things, permit shipowners and operators to evaluate the performance of external entities (flag states, classification societies and recognized security organizations) that they may be considering to associate with their vessels.

Andrew J. Norris, a retired U.S. Coast Guard captain, is an attorney currently working as a senior regulatory compliance consultant at Independent Maritime Consulting LLC. He can be reached at anorris@independentmaritime.com or by calling (401) 871-7482.

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