Responding to
petroleum tanker
inspection observations
<<*>>
Capt. John R. Dudley
Koch Shipping Inc.
Wichita, Kansas
--------Intertanko Vetting Seminar
Athens - 8 April 2005
Who am I?
Captain John R. Dudley
Manager of Marine Operations
Koch Shipping Inc
Koch Shipping Inc:
• charters 600 tankers each year to transport
32 million tonnes of liquid cargo
in all trades worldwide on behalf of Koch interests.
• provides vetting services for all tankers:
chartered by KSI, or
calling at Koch owned docks, or
calling at Koch leased terminals.
DISCLAIMER
This presentation represents only the
vetting policies and procedures of KSI,
and does not represent in any way the
points of view of other members of the
OCIMF or of any other group or
association to which KSI is a member.
Background for vetting - John Dudley:
• honors graduate of the U.S. Merchant Marine Academy,
• 6 years as tanker officer for Exxon, up to
Chief Officer of crude oil and chemical tankers,
• 2 years Master of dynamic deep-ocean drillship,
• 2 years assistant professor, Maine Maritime Academy,
• 4 years 5 million bbl. petroleum terminal manager,
• 4 years seismic/research vessel operations Lamont Labs,
• 6 years Canadian offshore oil development and production,
• 2 years asphalt tanker upgrade program & management,
• 8 years chartered vessel vetting and operations management,
• author - GARD handbook of tanker operations.
Why does Koch vett your tankers?
1. To identify tank vessels and owners that
represent an acceptable risk to the marine
transportation of crude petroleum and its
products and use them in our trading
ventures.
2. To identify tank vessels and owners that represent
unacceptable risk - and exclude them from Koch
activities.
The stock in trade of the Koch “Goodship” vetting
program is an inventory of ACCEPTED TANKERS.
Koch Supply and Trading makes $ 0.00 on every
tanker that is not approved for use after review of its
vetting credentials.
Koch Supply and Trading, and other Koch affiliates
make $ millions every year on the tankers whose
owners prove to us to be:
• well managed,
• well manned, and
• well maintained,
and therefore suitable for our use within our risk profile.
Tanker operations is not and never has been an easy job.
Both the ships and the business are stupefyingly complex.
Success depends on the water-tight cooperation of a large
number of disparate players, many with conflicting interests:
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cargo scheduler (operations assistant of the trader)
charterer’s vessel operations coordinator
cargo insurance broker and underwriter
charterer’s P&I Club
independent petroleum inspectors
measurement field agents - cargo auditors
port pilots, agents and line handlers
charterer’s chartering manager
vessel, master, officers and crew
vessel owner and technical managers
vetting manager
vessel class society
When things do not go well, one reason is: there
have been no credential or licensing requirements
for many of the participants in the marine venture!
Take owners and managers for example:
From the launching of the Gluckauf in 1886 …
until 1998 - for more than 100 years,
- you did not need a license to be an owner
or a manager of an ocean going tanker!
The tanker Gluckauf after grounding in fog
at Fire Island New York 1893
What happened in 1998?
ISM
Since ISM, you are doing better at your business:
Intertanko graphic
While ISM is certainly not the only contributor
to the favorable trend in tanker incidents
(SIRE, GPS, Paris MOU, etc. have helped),
there can be no doubt that ISM has been a major
contributor to better performance of your ships.
After decades of responding to tanker incidents
by adding new ship systems, the marine “industry”
suddenly realized what an old sea captain told
me 20 years ago: ……...
“Trouble starts at the top.”
Captain L.C. McKay
Or, as recently re-stated:
“The deciding factor in shipping accidents
is the Shipowner!”
Torkel Soma - DNV researcher 2005
Now that we agree on the importance
of a tanker management with a viable
Safety Management System,
How is a vetting manager going to measure
a tanker owner or manager’s
safety management culture ?
A. By the wine they select at lunch?
B. By the size of the Christmas basket?
C. By sending an auditor to the Manager’s office to
verify that the staff is following the procedures
in the owner’s SMS?
D. By finding evidence of an active, living,
breathing Safety Management System in the
owner’s inspection report observation replies.
“Even today, shipping ventures remain
adventures.
An owners ability to respond to a nonconformity
is the best evidence we can use
in evaluating their ability to respond to any incident.
It is the best way for us to judge
how the owner will respond in time of crises,
to keep an incident from becoming catastrophic.”
Rob Brown
President - Koch Shipping
February 2005
So, … when the SIRE inspector leaves the
gangway, the vessel inspection is finished;
Then, the vetting of the vessel’s
management begins …… !
What is the vetting manger to look for
in the manager’s SIRE report replies
to measure the owner’s SMS?
“The underlying principles of the ISM Code include
development of a safety culture not only as a matter
of policy, but also systematically in practice, from
top management ashore down to the officers
and crew at sea.”
Intertanko: “ISM Legal Implications” 9/96.
“Non-conformity – means an observed situation
where objective evidence indicates
the non-fulfillment of a specified requirement.” Ibid.
“Major non-conformity – includes lack of
effective and systematic implementation
of a requirement of the ISM Code.” Ibid.
Class NKK ISM Code summary:
1.4.4 Functional requirements of a SMS include
procedures for reporting accidents and non-conformities
with the provisions of this Code.
9 Reports and Analysis of Non-conformities,
accidents and hazardous occurrences:
9.1 The SMS should include procedures ensuring that
non-conformities, accidents and hazardous situations
are reported to the company, investigated and
are analyzed with the objective of improving
safety and pollution prevention.
9.2 The company should establish procedures
for the implementation of corrective action.
NKK ISM summary (cont.)
10.2 In meeting its maintenance requirements,
the company should ensure that
.2 any non-conformity is reported
with its possible cause, if known,
.3 appropriate corrective action is taken, and
.4 records of these activities are maintained.
When review of a SIRE report is necessary,
the Koch Goodship vetting process requires that every
SIRE/CDI observation is read, scored and recorded.
The distribution of scores looks something like this:
number of
observations
0
1 to 4
5 to 8
9 to 12
13 to 16
17 to 20
21 to 24
25 to 28
29 to 32
33 to 36
report
score
10
9
8
7
6
5
4
3
2
1
number
of ships
60
230
335
190
110
100
140
80
40
20
% of
total
5%
18%
26%
15%
8%
8%
11%
6%
3%
2%
currently
approved
40
185
235
115
40
35
0
0
0
0
%
approved
66%
80%
70%
60%
36%
35%
0%
0%
0%
0%
note: percentages are distorted by ships that have been scrapped - so are no longer “approved”.
I frequently review SIRE and CDI inspection reports
that contain 10, 12, 15, or 17 observations.
I then carefully read the owner/manager’s replies
to the dozen or more observations and often find them
to be completely devoid of:
• any mention of the owner’s Safety Management System,
• any effort to evaluate the root cause of the problem,
• a positive statement that the deficiency is corrected,
• anything remotely resembling an initiative to put in place
measures to prevent the event from happening again!
I care less about whether you fixed it for the inspecting company
in July than I do about whether it is still going to be fixed
when my cargo is on the ship in November!
I can only conclude from these sets of replies that:
• the owner’s SMS is not an integrated part of
their management processes, or
• the owner purchased his ISM DOC, or
• the person writing the response has been
poorly trained and instructed, or
• The owner/manager places a low priority
on the importance of the SIRE replies he sends
and is unconcerned about he impression they
create.
You have invested hundreds of millions of dollars
in your ships and their ISM systems,
$ millions in your shore establishment
and Safety Management System,
$ millions in crew recruitment,
safety management training and pay,
and then you write replies to a SIRE report,
replies that will tell me
if I can trust your ship with my cargo,
and you don’t show me the money!
Some replies which are not accepted:
• “Rectified.” ….. (trust me!?) ….
Some replies which are not accepted:
• “Rectified.”
• “when convenient”… (spending money is
never convenient!)
Some replies which are not accepted:
• “Rectified.”
• “when convenient”
• “at the earliest opportunity” (but we can’t plan
far enough ahead to give you a date.)
Some replies which are not accepted:
• “Rectified.”
• “when convenient”
• “at the earliest opportunity”
• “We have reminded the Master/Chief
Officer...” (what about the next Master/Chief
officer?)
Some replies which are not accepted:
• “Rectified.”
• “when convenient”
• “at the earliest opportunity”
• “We have reminded the Master/Chief ...”
• “The parts have been delivered on board.” (but
are they correct? … installed? …. calibrated?
working? ….. class approved?)
Some replies which are not accepted:
• “Rectified.”
• “when convenient.”
• “at the earliest opportunity.”
• “We have reminded the Master/Chief ...”
• “The parts have been delivered on board.”
• “He has been cautioned and instructed ...”
Consider some examples
of real replies that have
crossed my desk,
(honest!):
Bad example #1
Observation:
“The vessel does not have a vapor release response plan.”
Owner’s Reply:
“The vessel’s vapor release response plan is included in
section 8.3.2 of the vessel’s ISM Manual.”
Example #1
Better reply:
Recognizing that the Master was not aware of the location
of the vapor release plan within our SMS manual,
we sent our superintendent on board 11 Oct 02, and he
conducted SMS training with all officers so that they are
now fully aware of all contents of our SMS procedures
manual.
Bad example #2
Observation:
“The main engine is covered with oil.”
Owner’s Reply:
“The main engine has been cleaned.”
Example #2
Better reply:
During the shipyard period Nov 2002,
we have arranged for a factory representative
to supervise work to eliminate all fuel
and lube oil leaks from the main engine,
after which the engine will be cleaned and re-painted
so that any future leaks can be immediately
detected and the cause of the leak corrected.
Bad example #3
Observation:
The IGS oxygen sensor bubbler was found without any water
in it while the vessel was discharging.
Owner’s Reply:
“The bubbler was filled with water immediately.”
Example #3
Better reply:
It was noted that the engineer’s pre-transfer checklist
did not include an item to check the O2 bubbler.
The engineers pre-discharge checklist has been amended
to include an item to verify
that the IG sensor bubbler is filled to correct operating level
prior to starting the cargo transfer.
SMS section 13.6, revised 11 October 2002.
(copy attached).
Bad example #4
Observation:
A June inspection found a C-of-C issued Feb, due in July:
“vessel to submit results of stern tube lube oil analysis”.
Owner’s Reply:
“Condition of class will be attended to in due course.”
Example #4
Better reply:
“Stern tube lube oil sample test results were submitted to
class on 17 March and Condition of Class was deleted on 22
April 2003. Deletion of C of C will appear on 1 July class
quarterly report.
Stern tube oil analysis has been added to the
vessel’s PMS at 6 month interval.”
Bad example #5
Observation:
There is no record of which fire detectors
are being tested.
Owner’s reply:
“Fire detectors are listed among the critical safety items.
Tests are done in rounds, each round consisting of
one group of sensors for each deck and section of deck.
The complete set of sensors is tested within a
two month period.”
Good example #1
Observation:
“Steering gear emergency reserve tank was found only 1/3
full of hydraulic fluid.”
Owner’s Reply:
“The low reservoir level was determined to be caused by a
leaking steering pump seal (1), which was replaced (2).
Reserve tank was refilled immediately (2).
The engineers weekly checklist has been amended to include
an item to “verify steering gear reserve tank is full”. (3)”
(1) - root cause analysis
(2) - corrective action
(3) - preventive measures put in place.
Good Example #2
Observation:
Pumproom entry procedure not IAW ISGOTT 2-17-4
and entry records not being maintained.
Owner’s Reply:
> “Root Cause: requirements of 2-17-4 were performed
but records of gas detector were not maintained.
> Corrective Action: Company SMS checklist for the
enclosed space entry permit was revised to add
entries for record keeping; rev. on 29 Nov 04.
> Preventive Action: Revised checklist was distributed
to the fleet accordingly.” (Korean owner with 18 obs.)
Good Example #3
(From a Mainland China owner)
>>>>>>>>>>>>>>>>>>>
A world-class response includes:
• The observation (SIRE), number and text repeated.
• A convincing statement that the root cause
has been sought and found.
• A statement that managers has “objective evidence”
that corrective action has been completed,(or will be
completed by a stated date), to fix close the item.
• A statement of preventive measures taken to avoid a
repetition of the condition (SMS change, etc.).
“Objective evidence”
A document, report, message, completed
checklist copy, note, or certificate in your files,
that you can show me when I come to visit
your offices.
Something that “closes the loop” on the
deficiency!
Which brings us the the subject of audits ...
After years of wrestling with the question of
“what framework can I use to audit
tanker owners and managers?”
Now we have one …………...
The audit process Koch proposes to follow is:
• Indicate a desire to audit an owner against the TMSA
• Wait until the owner indicates that they are ready.
• Review the owner’s SIRE inspections and history
for areas of management weakness,
•
-
Visit the owner’s or manager’s HQ and review their
objective evidence of their self assessment,
their gap analysis of what needs improvement, and
their plan of action for closing the gaps.
SUMMING UP:
Owners need to give really serious thought to
who is writing their answers to SIRE reports.
The SIRE responder should be thoroughly trained
and conversant with, and have free access to:
 The owner’s SMS,
 The SMS non-conformity process
 Root cause analyses,
 Company management structure &
approval authorities,
 Vessel’s maintenance schedule,
 Manning department.
Finding root cause is not an ability that all are born with.
The US Air Force spent $1million on a study to define
the techniques that their most effective officers used to find
the root causes of problems inhibiting organizational
effectiveness.
The result is called “Analytic Trouble Shooting” and is
a course available from:
http://www.kepner-tregoe.com
http://www.apollorca.com , and others
This is NOT an endorsement. There are other providers,
I just know that the K-T system works because I took
the course, and the other has been recommended to me.
The good news:
Is that beginning this month,
with the introduction of WebSerm II
owner’s vetting mangers will have two chances
to reply to a SIRE report:
First Reply - within 14 days - per vetting company’s
requirement for approval,
containing corrective intentions, and
Second reply - giving closure by indicating:
• verification of the root cause of the observation,
• confirmation of corrective action completed, and
• indication of preventive measures implemented.
Is there a return for all of this effort?
Judging by the Koch experience - YES!
For the last 3 years Koch has been implementing a program
of 10,000% compliance - 100% compliance with laws and
regulations 100% of the time!
In 2004 Koch companies turned in record performance
in areas of compliance and environmental health and safety.
There were fewer lost time injuries than ever
and fewer environmental releases.
Those releases that did occur were smaller than previously.
By the end of the year, nine Koch company sites
had been certified as Voluntary Protection Program
Star Sites, the highest US OSHA designation.
Koch’s 5-year results (1998-2002):
• 1 crew fatality
• 3 medical diversions
• 7 spills; total < 1 barrel spilled
• 2 detentions (lifeboat failures)
• 3 general average claims
• 4 arbitration cases
For the oil company vetting manager,
every marginal vessel he/she approves
can be a career decision.
He/she is not going to bet his/her career
on an owner who sends second-rate replies
to what are considered to be
serious vessel deficiencies.
As professional mariners,
we are called
to be faithful and successful
custodians of the oceans
and the crews
entrusted to our care.
So:
Help me help you
to get your ship accepted …..
Show me you care enough
to send your very best response
to every inspection
comment or deficiency.
Thank you!
There’s more to tanker shipping than meets the eye.