“This may be the last quarterly OMSA Newsletter you receive!!!”

You have probably received similar warnings in the past alerting you that a magazine subscription is about to expire and that it is time to send more money. In this case, it is not a warning; it’s a heads up that we are going to be changing the way we communicate with OMSA members. It is all part of our effort to bring you news and information on the issues affecting the industry more quickly and more effectively.

Right now we publish our newsletter once a quarter. That means that announcements of new regulations or laws that affect you may be three months old by the time we put together newsletter and mail it out to you. We can do better than that.

So, we are going to start sending a monthly issues update to OMSA members by e-mail. It will be short and it will focus on information you need to run your businesses. One other advantage will be that we can send the updates directly to several people within each member company. To that end, we will be asking you for correct e-mail addresses as we prepare to send out the first update in December.

We will continue to publish our regular newsletter twice a year and, of course, we can provide faxed copies of the monthly updates for members who do not use e-mail. Overall, we think that this will be a big step forward in our efforts to keep you informed and in touch with the issues affecting our industry.

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As an association, we can look back at this year with some pride. OMSA’s members have accomplished a lot and we’ve set the stage to accomplish more in the year ahead.

Security was the overwhelming challenge facing the offshore support sector in 2004 and OMSA’s members came through with flying colors. Through the OMSA Alternative Security Plan, we and our partner Hudson-Trident were able to tailor plans for some 450 vessels in the offshore fleet. It is widely agreed that the key to security for our industry is the vessel crew and through the OMSA Ship Security Officer Training Program, members trained more than 2,000 mariners on what to watch for and how to keep their vessels from becoming targets. Congratulations to all of the OMSA members who were involved in this significant achievement.

Your accomplishments on the Jones Act have been hard earned, but important. OMSA has closed two dangerous loopholes that threatened every U.S. Flag operator in the Gulf. We are hard at work closing a third loophole. Please see the Jones Act articles later in this newsletter.

Beyond that, we have faced a full plate of regulatory issues this year. It is worth taking a close look at one initiative in particular. This summer the Coast Guard announced new regulations for Ballast Water Reporting. The new requirements would have been extremely difficult for the industry to meet and would have resulted in a tremendous paperwork burden on both the Coast Guard and vessel operators. OMSA was able to call on years of cooperative relationships with both the Coast Guard and other industry groups in looking for a solution. We reached out to the Coast Guard and, once the full scope of the problem was presented to officials, they immediately grasped the difficulties it presented for the mariners who would need to comply with the regulations. The Coast Guard agreed to a series of modifications that allowed the industry to comply without facing excessive burdens. Those discussions also opened the door for OMSA to develop best practices guidelines for ballast water management, again saving members the time and expense of developing individual policies. There are really two key ingredients to this kind of success story: Being able to speak with one voice for a united industry and having the established relationships that allow us to work on solutions with federal agencies and other maritime groups.

It is hard to put price tags on the work OMSA does on behalf of its members. But it is worth noting that, in the case of ballast water, the improved approach that OMSA was able to reach with the Coast Guard may have saved individual OMSA members from fines that could cost up to $27,500 per day per vessel.

Bottom line: When you look at the value of your OMSA membership, you need to look at the cost of not having OMSA there on your side.

OMSA Meets in Houston
OMSA heads to Texas for our next quarterly meeting. The meeting will be held:

Tuesday, October 19, 2004
OMNI HOUSTON
Four Riverway Dr.
Houston, TX

We have a couple of special speakers at the General Business meeting. Captain Ron Branch, Chief of Marine Safety for the Eighth Coast Guard District, will update members on new Coast Guard initiatives and Tom Marsh, publisher of ODS-Petrodata's Gulf of Mexico Newsletter, will speak on the prospects for drilling in the Gulf of Mexico. We’ll also talk about a number of important issues, including steps OMSA members need to take in complying with new ballast water requirements, AIS and other security related issues and a new EPA initiative that may have a dramatic effect on vessel engine requirements.

OMSA Christmas Dinner Dance
The annual OMSA Christmas Dinner Dance is scheduled for Friday December 10th at the New Orleans Hilton Riverside Hotel. You can expect to see a registration notice from OMSA in early November. Don’t delay…send that registration in as soon as you receive it.

OMSA Winter Meeting
OMSA’s winter quarterly membership meeting will be held January 20, 2005 at the Hilton Riverside, New Orleans, Louisiana. Meeting registration forms will be mailed in December and available at the same time on the OMSA website.

What if….

What if you ran a small neighborhood grocery store?

What if one day a large international grocery conglomerate - let’s call it Megastore - announced that it had signed the following deal: It would build a store right next to your store, it would design the store, oversee its construction and help market it, then it would lease that store to a brand new company that would compete for your customers?

What if the government nixed that deal because it gave Megastore too much control over the grocery business and the very next day Megastore announced a new deal: Now it would loan your competitor more than 100% of the money to build that store next door to yours?

Would you want to find out why Megastore had suddenly taken such an interest in moving into your market? Would you want the government to investigate and find out what kind of side-deals Megastore had cut with the new store operator?

That is just where OMSA members find themselves today, as they try to figure out why Groupe Bourbon, a French vessel operator, suddenly decided to bankroll U.S. flag vessels operating in the Gulf of Mexico.

Two years ago, Groupe Bourbon announced an agreement to build ten large OSVs and lease them to a brand new company, Rigdon Marine, which would operate them in the Gulf of Mexico Jones Act trade. Groupe Bourbon even announced that it had agreed to market the vessels along with its worldwide fleet. Faced with this evidence of foreign control, the Coast Guard refused to allow the first vessel into the Jones Act trade. Immediately, Groupe Bourbon changed the deal. Now it would loan $128 million to Rigdon Marine to build the ten boats. Overnight, Groupe Bourbon had become a mortgage banker, willing to loan out more than 100% of the value of the vessels. And now they claimed there was no marketing deal or any other kind of deal.

More than 100% of the cost of the vessels? No strings attached? It just didn’t sound right and OMSA asked the Coast Guard to investigate. But amazingly, the Coast Guard approved the deal. It said it would take at face value Rigdon Marine and Groupe Bourbon’s pronouncement that there was no foreign control and that there were no side agreements. In other words, despite the announcement by the companies that they would cooperate in marketing the vessels, despite the details of the mortgage and despite the Coast Guard’s earlier clearly stated concerns over foreign control, the agency approved the deal without investigating.

Suddenly U.S. vessel operators faced a bigger problem – the Coast Guard decision opened the door for other foreign operators to use vessel mortgages as a way to force their way into the Jones Act market. In the words of Yogi Berra, it was déjà vu all over again; the long fight we went through to close the loopholes on foreign lease financing would have to be repeated to close the new loophole with foreign mortgages.

That is a quick summary of where we are and how we got here. On the plus side, we are not fighting this battle by ourselves. OMSA is working closely with the other groups representing Jones Act vessel owners and their crews to address the vessel mortgage finance threat. In fact, in a September 17th letter to the Coast Guard Commandant, the Maritime Cabotage Task Force called mortgage arrangements like Groupe Bourbon’s “a dangerous new loophole in the fabric of our nation’s cabotage laws” and urged the Coast Guard to “define the criteria it will use to determine when a mortgage financing arrangement constitutes illegal foreign control.” The letter was signed by ten different representatives of vessel owners and associations.

We and the rest of the U.S. Jones Act coalition view foreign mortgage finance as the next big threat to U.S. operators and it is not a battle we can walk away from. Even vessel owners who are not affected by the Groupe Bourbon deal know that they may be affected by the next deal, the deal after that or the deal after that. For OMSA, the fight begins with ensuring that the Coast Guard does a through job of investigating the current transaction between Groupe Bourbon and Rigdon Marine.

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Congressional Effort Brings Jones Act Victory
We can report significant victories in the effort to defend the Jones Act in Congress this year. With the Coast Guard Authorization Bill passed in July, Congress effectively closed loopholes in both foreign lease financing and launch barge exemptions. On lease financing, Congress put in place criteria that should ensure that only legitimate financial institutions are able to engage in foreign vessel leases of Jones Act-qualified vessels, the arrangements must be hand-off financial arrangements and cannot involve charter back or other side agreements. While many existing deals were grandfathered, allowing the foreign operators to continue their control, Congress was firm in saying that all offshore supply vessels currently subject to foreign lease finance agreements will have three years to make other arrangements or leave the U.S. trade.

With launch barges, congress tightened the restrictions on foreign barges allowed to work in the Gulf and created a mechanism for U.S. vessel operators to receive word of offshore projects with enough lead-time to compete for the work.

These two changes are substantial victories in OMSA’s defense of the Jones Act and represent more than two years of effort by OMSA members, staff and Thompson Coburn, the firm that OMSA engaged to help fight these battles.

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The Gulf of Mexico offshore oil industry is still working to recover from the destruction caused by Hurricane Ivan. Rigs that were moored to withstand “hundred year event” storms were dragged miles from their sites. The Minerals Management Service has posted a daily update of the status of offshore facilities on its website (http://www.mms.gov). As of the first week of October, MMS reported that oil production shut-in by the storm amounted to about 26% of the daily GOM production and shut in gas amounted to 14%. In many cases the first order of business has been to make sure underwater pipelines were secure and had not been damaged by any of the structures that were pulled free by the storm.

OMSA members got a preview of some of the damage that a hurricane like Ivan could cause at the July membership meeting when Tommy Laurendine, MMS Chief of the Office of Structural & Technical Support, gave a presentation about the need to survey offshore structures and make sure they were able to withstand hurricane forces. That is likely to receive a great deal of focus from MMS in the coming year.

OMSA has been working with staff at the Louisiana Job Corps and Job Challenge Programs in Carville to create a maritime training program. A group of OMSA members visited the site in May. Since that visit there have been continuing talks between the Carville staff and OMSA and its member companies.

The Louisiana Youth Challenge Program is a 22-week drug-free (frequent testing) military style "boot camp", run by the Louisiana National Guard, where at risk youth (16-21) are taught practical life skills, respect and self-discipline. Graduates of this program are eligible for the 90-day Job Challenge Program where they are taught job skills and receive certifications in careers such as welding and heavy equipment operator.

Rodney Coco of Seacor and Ken Parris of OMSA have taken the lead in working with Carville officials. OMSA will provide the Job Corps personnel with a listing of our required minimum training and certification for entry-level personnel. The information OMSA intends to provide as mandatory is STCW Basic Safety Training, OMSA Safety Awareness Training, obtain a Coast Guard MMD and pass a 5-panel Drug Screen. For additional information on this initiative contact Ken Parris at (504) 734-7622 or email ken@offshoremarine.org.

In April, the Board authorized OMSA staff to update the OMSA safety program to include changes in safety training which have occurred over the last decade.

In July the board was presented with a preliminary report on the proposed changes to the OMSA Program. OMSA Vice President Ken Parris is currently coordinating a member group in updating the OMSA Safety Training program. The goal is to have the updated program in place by January. As a part of this process, OMSA is currently in discussions with Moxie Media to update the existing OMSA Safety Training video.

The new program would have three components:

OMSA Safety Training program – The existing OMSA program would add nine new units covering Behavioral Based Safety, Welding and Burning Safety, NORM, Marine Debris, Workplace Violence, Emergency Evacuation, Walking and Working Surfaces, Electrical Safety and Bloodborne Pathogens. This would expand the training from approximately 4 hours to approximately 8 hours. The lessons would be set up in a modular format so that they could be given all at one time or spaced out over time.

STCW Plus – The STCW Basic Safety Program is a more intensive training program which takes five days to complete. However, it does not cover several of the safety areas which will be covered by the OMSA safety program. For crewmembers who go through the STCW program, OMSA would require only those additional safety modules as an add-on so that there would be no curriculum duplication in meeting both STCW and OMSA safety program requirements.

Grandfather Test out – For crewmembers who have already been through the OMSA program or STCW Basic, the association would offer the opportunity to test out. This would involve a watching the new video, reviewing the written material and a final test.

You can now order the full line of Moxie Media Safety, Security and Training Videos through OMSA. By buying your training videos through OMSA you will get the high quality of Moxie Media products with the ease of dealing with OMSA for your ordering and billing. In addition you will be supporting your association.

The Moxie Media Security Training Series for Maritime Security Awareness is probably a best bet for associate members who need to train vessel service personnel.

In the future we will be offering a new Safety Training video series to meet the SafeGulf new hire safety orientation requirements. If you have any questions on the breadth and depth of Moxie’s video offerings just visit our website and click on the Moxie link, make your choice and call OMSA to order any of the many Moxie offerings.

By the end of December of this year, the Coast Guard will require vessels operating in certain specific Vessel Traffic Control areas to carry AIS, a transponder system which allows vessels to send their own positions and receive the positions of other vessels in their vicinity. Under current regulations OSVs, liftboats, tugboats and utility vessels over 65 feet long will be required to have AIS when operating within VTS zones, including New Orleans, Morgan City, Port Arthur and Houston.

The Coast Guard is currently working on another rulemaking, which could expand the classes of vessels required to carry AIS and the areas in which they would be required. At the same time there are still potential stumbling blocks to compliance. The radio channels reserved for AIS communications are held by a private company, which has so far refused to make them available. OMSA has weighed in to urge the Coast Guard to ensure that channels are available.

The Coast Guard is also addressing two related issues, one involving installation standards and the other involving companies that use FCC fleet licenses instead of individual vessel licenses for their radios. The original AIS regulations included installation guidelines which were developed for large vessels. OMSA and other groups raised the concern that there was not enough room on the wheelhouse roofs of small offshore vessels to meet the guidelines. Because of the smaller space for antennas, interference from the AIS equipment can cause radios to emit a popping sound. As a result of those concerns, the Coast Guard is finalizing installation guidelines for smaller vessels. As soon as these have been released, OMSA will share them with the industry. Additionally, an unanticipated problem has emerged for operators who use FCC fleet licenses for their vessel radios. Each vessel AIS system must have a unique identifying number, tied to the vessel radio license. However, in those cases where vessel owners have used fleet licenses, there is no unique number for each vessel. The Coast Guard and the FCC are currently working on options that would allow those vessel owners to transfer from a fleet license to individual vessel licenses without having to pay excessive costs. Companies affected by this problem should contact OMSA so that they can be kept up-to-date on any changes.

Background on AIS may be found at http://www.navcen.uscg.gov/enav/ais/default.htm.

Section 410 of the Coast Guard Authorization Act of 2004 essentially requires those vessels subject to the AIS regulations to be equipped with electronic charts. The Coast Guard is required by law to publish implementing regulations by January 2007. Unless there is a change before the 2007 date, towing vessels, OSVs and liftboats operating in VTS zones will be required to carry electronic charting equipment in addition to their AIS systems. OMSA will continue to monitor the progress of these requirements.

In a June 14, 2004 notice in the Federal Register, the Coast Guard placed stringent ballast water reporting requirements on vessels operating in U.S. waters. Under the Final Rule, all vessels having tanks which could be used for ballast were required to report any movement from one Captain of a Port zone to another to the Coast Guard, regardless of whether they took on or released ballast and regardless of the source of that ballast.

OMSA working jointly with the American Waterways Operators (AWO) met with RADM Gilmour, Assistant Commandant for Safety, Security and the Environment, to request relief from what appeared to be overly complex reporting requirements. As a result of that effort, OMSA members will only have to submit ballast reports for vessel moves if they physically take on or release ballast water from the environment (meaning seawater or river water). The Coast Guard also agreed to combine the New Orleans and Morgan City COTP zones for reporting purposes, meaning vessels do not have to report when they cross between the two zones. Finally, the Coast Guard agreed to delay enforcement of the regulations until the beginning of November to give operators a chance to come into compliance.

Additionally, OMSA requested the Coast Guard to consider allowing vessels report ballast water once a month instead of on a daily basis. Responding to the needs of industry the Coast Guard is currently finalizing an interactive online form that would allow users to submit reports on a monthly vs. daily basis.

In a separate notice on July 28, the Coast Guard required vessels returning to U.S. waters to carry ballast water management plans. OMSA is currently working with the Coast Guard to develop industry best practice guidelines for ballast water management plans.

Coast Guard interpretations of both licensing and STCW requirements threaten the ability of U.S. mariners to work on offshore support vessels overseas. For mariners working on vessels in foreign locations, some port state control officials are demanding that mariners hold a Coast Guard license issued at the 200-ton authority level or above. In addition, some overseas Coast Guard inspectors have required that the captains of vessels working foreign hold a license with oceans authority.

Current interpretations of Coast Guard policy by the REC’s have limited the route of mariners with Near Coastal licenses to Domestic service only. When those mariners who hold Coast Guard licenses issued at or below the 200-ton level, who are currently working foreign renew their licenses, or new mariners are licensed at this level who wish to work foreign, they would receive a Domestic, Near Coastal limitation on their license. This makes it impossible for these mariners to work overseas. In addition, current interpretations of Coast Guard policy by the REC’s limit new Oceans authority licenses to Domestic, Near Coastal routes unless the mariner also has an Oceans authority STCW endorsement. Again, this precludes any overseas work.

Further confusing the issue, the Coast Guard has approached licensing as if there was an overlap between the U.S. “not more than 200 GRT” license and “STCW under 500 GT” endorsement. However, practically the two do not overlap, making it impossible for mariners to receive a traditional Coast Guard 200-ton license, which would allow them to work foreign.

To upgrade a mariner’s license from 100 GRT to 200 GRT, there are currently two practical options, neither of which is desirable to mariner’s. They must first upgrade to 150 GRT and then serve 90 days as a deckhand on a vessel over 150 GRT or test for Master 500 GRT. Either approach is costly and time-consuming.

OMSA staff presented a briefing paper to the National Maritime Center laying out the problems facing mariners who wish to work overseas as a preparatory document to a teleconference between OMSA and John Fontenot and Rodney Coco of Seacor. During the conference call personnel from the NMC agreed to remove the Domestic restriction from mariners’ licenses and to instruct inspectors from Coast Guard Activities Europe that Oceans licenses are not required for vessels working foreign domestic routes. While the Coast Guard will no longer limit the license of the mariners, it is vital the companies ascertain that Port States will accept Near Coastal licenses and STCW endorsements for vessels working in their waters prior to assigning a mariner with such a license to operate a vessel overseas. The NMC is currently consulting with Coast Guard Headquarters to determine if a policy change will ease the path to tonnage upgrades for mariners who wish to upgrade from 100 to 200 ton licenses. If a policy work-around is not possible OMSA will seek a regulatory change.

In the implementation of the STCW Code, OMSA was successful in gaining Coast Guard approval of an on board skills assessment program leading to the issue of Trade-Restricted STCW documents valid for the operations of OSVs under 3000 Gross Tons on near coastal domestic routes. In addition OMSA received a Trade Restricted course approval for the operation of Large OSVs (over 3000 GT). The STCW Code had a phase-in period that that originally expired February 1, 2002, but was extended at OMSA’s behest to February 1, 2003. The phase-in period allowed for grandfathering of existing mariners and gave flag state authorities broad latitude during this time frame in the use of hybrid training and assessment programs leading to the certification of mariners. Mariners who desired to be licensed after February 1, 2003 are subject to the full effect of the STCW Code.

OMSA had worked to gain Coast Guard approval for a streamlined program that would apply to officers of offshore support vessels. However, after four years of discussions with the Coast Guard and training providers, it became apparent that the goal could not be achieved. Following consulation with OMSA members affected by the program, it was agreed that the better course would be to adopt the non-trade restricted training program.

Mariners who need to remove the domestic, near coastal restriction from their OSV license will be required to complete the non-trade restricted slate of courses. They will not be required to complete the full slate non trade-restricted assessments, only those applicable to offshore support vessels. These mariners will then be qualified to upgrade to a non trade-restricted oceans authority license. It is expected that this slate of courses will take a mariner approximately two years to complete during their off time.

After February 1, 2003 the oceans route extension training also became an integral part of the Large OSV Training Program. During a teleconference with NMC personnel on Sept 30th they gave a verbal OK to delaying the incorporation of the additional non trade-restricted training into the Large OSV Training program for two years to allow for mariners to enter into and complete the new training pipeline.

For engineers there is currently no approved non-trade restricted program to utilize as a model similar to that for deck officers. OMSA has begun working with effected member companies will to determine an appropriate course of action.

The ability of U.S. vessel owners to work their boats in the overseas oil fields has been threatened by a series of Coast Guard policy interpretations. In a nutshell, a series of rulings threatening current overseas operations began with the issue of Change 3 to Navigation Vessel Inspection Circular (NVIC) 11-93. Change 3 to NVIC 11-93 was followed in April by a notice in the Federal Register whereby the Coast Guard “re-interpreted” the meaning of the term International Voyage (substituting the definition of a “foreign voyage”) as it applied solely to the application of international ship security regulations. The “re-interpretation” of the term International Voyage as it applies to security regulations was followed in late June by another notice in the Federal Register whereby the Coast Guard announced that it was taking a more restrictive stance towards the application of SOLAS to U.S. oilfield support vessels working from foreign ports, in essence doing away with the concept of a foreign domestic voyage and applying SOLAS in full to U.S. crewboats, liftboats and supply vessels, etc. working from foreign ports.

As a lead up to the NVIC and two notices above, U.S. legislation had created a new term (foreign voyage) and independently applied the ISM code and ISPS code to U.S. vessels working outside domestic waters. Congress has applied these two international standards to U.S. vessels independent of international requirements. Therefore, U.S. vessels that are working outside domestic waters and not subject to SOLAS may be required by U.S. Code to hold ISM and ISSC certificates regardless of the requirement for such certificates under international standards.

A series of meetings and teleconferences held between OMSA staff, OMSA members and the Coast Guard has resulted in a temporary stay of the applicability of the most threatening of the requirements found in Change 3 to NVIC 11-93 and the two Federal Register notices. This stay however, is only temporary, until such time as a joint Coast Guard and industry workgroup can examine the issues and develop a long-term compliance strategy. OMSA has requested that such a workgroup begin its work as soon as possible to develop national policy, rather than wait for some future field enforcement actions.

OMSA has been working with the staff at the Coast Guard National Maritime Center (NMC) to alleviate the career advancement problem for liftboat operators created when the NMC issue Policy Letter 09-01. Essentially this policy eliminated the 1-day credit for 1-day worked sea service credit for liftboat personnel while in the elevated mode and replaced it with a 1-day credit for 3-days worked. The practical affect of this change was to increase the time it would take a liftboat operator to qualify for master from 4 calendar years to over 14 calendar years, an unacceptable proposition.

OMSA through its liftboat committee has proposed to the Coast Guard a special liftboat training program that would satisfy the Coast Guard that liftboat operators were qualified to operate the vessels and should receive 1-for-1 sea service credit. The project has been championed by the National Offshore Safety Advisory Committee (NOSAC) and is supported by local Coast Guard offices and the Eighth Coast Guard District. While the NMC is satisfied with the industrial training portion of the program they feel it needs additional substance in the area of vessel navigational training. The liftboat committee will update the program and resubmit it to the NMC for approval. The issue is also on the agenda for discussion at the next NOSAC meeting to be held October 28th in Galveston, Texas.

NOSAC is scheduled to meet in Galveston, Texas at the Galvez Hotel on October 27 and 28. The Liftboat Subcommittee will meet to work on the Liftboat training program from 1-3:30 p.m. on October 27 and the committee as a whole will meet from 9 a.m. to 3 p.m. on October 28rd.

The October 28rd agenda includes the following: (1) Report on issues concerning the International Maritime Organization and the International Organization for Standardization. (2) SOLAS compliance for foreign operation of U.S. flagged Offshore Supply Vessels including Liftboats. (3) Report from the Liftboat Subcommittee on operations procedure/training for liftboat operators. (4) Offshore Helidecks—new and revised API and ICAO standards. (5) Status report on Coast Guard/ Minerals Management Service inspection of fixed facilities. (6) Revision of 33 CFR chapter I, subchapter N, Outer Continental Shelf activities. (7) 33 CFR chapter I, subchapter NN, Temporary Final Rule on Deepwater Ports, and status of license submissions for LNG deepwater ports.

Many OMSA members will now be required to prepare Vessel Response Plans, perhaps within the next year. Section 701 of the Coast Guard Authorization Act of 2004 requires non-tank vessels over 400 gross tons to prepare and submit to the Coast Guard for approval Vessel Response Plans (VRP). The industry was exempted from the VRP requirements instituted by OPA’90. This legislation eliminates that exemption and would require a high percentage of OSV’s and some liftboats to carry Vessel Response Plans. The Coast Guard is required by the legislation to issue implementing regulations by August 2005. OMSA will monitor and work with the Coast Guard to ensure that OMSA members can comply with the new regulations.

The movement to implement a controversial crew alertness program is gathering steam. Section 409 of The Coast Guard Authorization Act of 2004 requires that towing vessels maintain logs of work hours to ensure that mariners do not exceed permissible hours. Section 409 requires that the Coast Guard conduct a demonstration project detailing the application of the Crew Endurance Management System (CEMS) to towing vessel work schedules prior to drafting implementing regulations, delaying the ultimate implementation of the requirement.

Section 415 of The Coast Guard Authorization Act of 2004 provides for the addition of towing vessels to those vessels inspected by the Coast Guard. Section 415 has provisions allowing the Coast Guard to designate an appropriate Safety Management System for towing vessels prior to the issue of implementing regulations. A subcommittee of the Coast Guard Towing Safety Advisory Committee (TSAC) will be formed to assist the Coast Guard in formulating the rules and regulations that bring towing vessels under Coast Guard inspection. OMSA will participate as a member of the TSAC committee and comment on any proposed regulations to ensure that our vessels are not disadvantaged by any new regulations.

The EPA has issued emission standards for marine diesel engines that require newly installed engines to meet standards for reduced emissions of pollutants. Each “Tier” of EPA regulations implements reductions in engine emissions. The Tier 2 standards are now in effect and will be phased in over the next few years apply to newly installed engines or replacements/rebuild of existing engines. The EPA has proposed the implementation of Tier 3 and/or Tier 4. Tier 3 reductions could be achieved through engine design, but Tier 4, which requires the use of after treatment devices can only be achieved through the use of low sulphur fuels. The EPA has published an Advance Notice of Proposed Rulemaking (ANPRM), which OMSA commented on in August. In the ANPRM, the EPA is considering whether or not to implement Tier 3 rules or wait until the wide availability of low sulphur fuels to go straight to Tier 4 reductions. While there is no specific implementation date for Tier 3 and Tier 4 reductions, they may be implemented as early as 2010.

In addition to the EPA rules, IMO has implemented rules for NOX emissions. These rules have now been ratified and go into effect on May 20 of 2005. These rules are retroactive to engines built after January 1, 2000. The IMO rules require an EIAPP (Engine International Air Pollution Prevention) Certificate, for vessels over over 400 Gross Tons they will need to hold an IAPP (International Air Pollution Prevention) Certificate in addition to the currently required IOPP (International Oil Pollution Prevention) Certificate. In the U.S. only the EPA can issue these certificates.

OMSA has commented on the ANPRM on Tier 3 and Tier 4 reductions requesting that the EPA work with industry to ensure that these rules are implemented with a full awareness of the affect they will have on industry. OMSA has also requested that an engine manufacturer speak at our next meeting to inform the membership of the potential effect the domestic and international rules will have on their vessels.

In an August 5th Federal Register Notice the U.S. Coast Guard announced the establishment of an alternative hull examination program for certain U.S. passenger vessels. In addition the notice gives offshore supply and passenger vessels the option of alternating drydock examinations with underwater surveys. Finally, it is giving industry additional latitude in scheduling inspections, creating parity between passenger vessels and all other Coast Guard-inspected vessels. The rule went into effect on September 7, 2004.

OMSA has been working with Coast Guard offices in the Eighth District for several years now to demonstrate the feasibility of conducting underwater inspections vs. drydocking OSVs. Unfortunately, while the technology has been proven, the resource constraints of the Coast Guard may preclude its use. Coast Guard OCMI’s have stated that traditional drydockings are less resource intensive, and that approval of underwater exams will be contingent on whether or not adequate inspections personnel are available.

MMS has updated its Marine Trash and Debris Notice to Leaseholders NTL 2003-g11. A free Powerpoint presentation is now available that can substitute for the requirement for vessel operators to show their crewmembers a specific video from the Offshore Operators Committee. Visit the OOC website for information on ordering the video or to download the alternate presentation at http://www.offshoreoperators.com/marinedebris/default.asp.

Information on the Coast Pilot, Charts, Electronic Charts, Print on demand Charts and other navigational information can now be retrieved from the NOAA Office of Coast Survey of the National Oceanic and Atmospheric Administration (NOAA) online. Topics in the Coast Pilot include channel descriptions, anchorages, bridge and cable clearances, currents, tide and water levels, prominent features, pilotage, towage, weather, ice conditions, wharf descriptions, dangers, routes, traffic separation schemes, small-craft facilities, and federal regulations applicable to navigation. For details on the Coast Pilot and other NOAA navigational information visit http://chartmaker.ncd.noaa.gov/nsd/coastpilot.htm.

The U.S. Coast Guard issued a clarification of its rule requiring that children under the age of 13 years wear personal flotation devices (PFDs) while aboard recreational vessels. The rules require that children under the age of thirteen be required to wear PFDs when they are above decks aboard recreational vessels that are under way. The Coast Guard has decided to retain the Federal requirement in addition to any state statue. A maximum civil penalty of $1,100 could be assessed for a violation of the Federal requirement or of a State requirement being enforced under the Federal regulation. For additional details see the Federal Register of July 20, 2004.69 Fed. Reg. 45589

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On July 22, 2004 the National Commission on Terrorist Attacks Upon the United States, commonly known as the 9/11 Commission, released the results of a two year study of the causes of the September 11th attacks and the steps America needs to take to protect against further attacks. One section of the report dealt with maritime security. It recognized that the Coast Guard and the industry have made great strides in protecting the nation's ports and waterways, but concluded that vulnerabilities remain. Specifically, "Mandated vulnerability assessments of the nation's 50 largest ports are not scheduled to be completed for years. Despite recent initiatives, the vast majority of all containers enter the country unchecked, and documentation requirements are easy to circumvent. The Commission believes that the Department of Homeland Security must continue to focus efforts on identifying, tracking and screening suspect containers."

The following are excerpts from the report:

At 8:46 on the morning of September 11, 2001, the United States became a nation transformed. An airliner traveling at hundreds of miles per hour and carrying some 10,000 gallons of jet fuel plowed into the North Tower of the World Trade Center in Lower Manhattan. At 9:03, a second airliner hit the South Tower. Fire and smoke billowed upward. Steel, glass, ash, and bodies fell below. The Twin Towers, where up to 50,000 people worked each day, both collapsed less than 90 minutes later.
At 9:37 that same morning, a third airliner slammed into the western face of the Pentagon. At 10:03, a fourth airliner crashed in a field in southern Pennsylvania. It had been aimed at the United States Capitol or the White House, and was forced down by heroic passengers armed with the knowledge that America was under attack.
More than 2,600 people died at the World Trade Center; 125 died at the Pentagon; 256 died on the four planes. The death toll surpassed that at Pearl Harbor in December 1941.

A Shock, Not a Surprise
The 9/11 attacks were a shock, but they should not have come as a surprise. Islamist extremists had given plenty of warning that they meant to kill Americans indiscriminately and in large numbers. Although Usama Bin Ladin himself would not emerge as a signal threat until the late 1990s, the threat of Islamist terrorism grew over the decade.

Who Is the Enemy?
Who is this enemy that created an organization capable of inflicting such horrific damage on the United States? We now know that these attacks were carried out by various groups of Islamist extremists.

The history, culture, and body of beliefs from which Bin Ladin shapes and spreads his message are largely unknown to many Americans. Seizing on symbols of Islam's past greatness, he promises to restore pride to people who consider themselves the victims of successive foreign masters. He uses cultural and religious allusions to the holy Qur'an and some of its interpreters. He appeals to people disoriented by cyclonic change as they confront modernity and globalization. His rhetoric selectively draws from multiple sources-Islam, history, and the region's political and economic malaise.

Bin Ladin also stresses grievances against the United States widely shared in the Muslim world. He inveighed against the presence of U.S. troops in Saudi Arabia, which is the home of Islam's holiest sites, and against other U.S. policies in the Middle East.
Since the plotters were flexible and resourceful, we cannot know whether any single step or series of steps would have defeated them. What we can say with confidence is that none of the measures adopted by the U.S. government from 1998 to 2001 disturbed or even delayed the progress of the al Qaeda plot. Across the government, there were failures of imagination, policy, capabilities, and management.

Imagination
The most important failure was one of imagination. We do not believe leaders understood the gravity of the threat. The terrorist danger from Bin Ladin and al Qaeda was not a major topic for policy debate among the public, the media, or in the Congress. Indeed, it barely came up during the 2000 presidential campaign.

Management
The missed opportunities to thwart the 9/11 plot were also symptoms of a broader inability to adapt the way government manages problems to the new challenges of the twenty-first century.

Emergency Response
The civilians, firefighters, police officers, emergency medical technicians, and emergency management professionals exhibited steady determination and resolve under horrifying, overwhelming conditions on 9/11.Their actions saved lives and inspired a nation.

Are We Safer?
Since 9/11, the United States and its allies have killed or captured a majority of al Qaeda's leadership; toppled the Taliban, which gave al Qaeda sanctuary in Afghanistan; and severely damaged the organization. Yet terrorist attacks continue. Even as we have thwarted attacks, nearly everyone expects they will come. How can this be?

The problem is that al Qaeda represents an ideological movement, not a finite group of people. It initiates and inspires, even if it no longer directs. In this way it has transformed itself into a decentralized force. Bin Ladin may be limited in his ability to organize major attacks from his hideouts. His message of inspiration to a new generation of terrorists would continue. Because of offensive actions against al Qaeda since 9/11, and defensive actions to improve homeland security, we believe we are safer today. But we are not safe.

During the development of the OMSA security plan a Coast Guard official made a telling comment to us. He stated that there are not enough government resources to protect every vessel, every port facility and every mile of waterway, so that we would have to protect ourselves. On its face the comment may seem harsh and insensitive, but it is true.

We are the eyes and ears of our government. We are the ones who are on the boats and in the ports. We are the ones who spend our days working the oilfields, not our government officials. The Coast Guard has given us a framework for vessel and port security, but it is our responsibility to carry out that security.

The 9/11 Commission stated that our enemy is committed. Our enemy is fanatic. Our enemy is flexible. Our enemy is imaginative. Our enemy is committed to the destruction of everything that we stand for.

The 9/11 Commission stated that our enemy was successful because the government did not believe that they posed a threat to the United States, but were wrong. The 9/11 Commission also stated that 90% of the post-9/11 funding for improvements in our domestic security have gone to aviation, to the neglect of other forms of transportation. To go back to paragraph one, we must protect ourselves.

We are the oilfield neighborhood watch. We can disrupt terrorist’s plans and execution. We are the eyes and ears on the water. Report the unusual or out of the ordinary. Make the implementation of your vessel security plans normal. Expect that your employees will challenge and identify anyone who attempts to board the vessel. Remember the old wartime adage, “Loose lips sink ships.” Be on the lookout for individuals that seem unusually curious about your operations. Pass the word. The 911 Commission cited the failure of government agents and agencies to communicate what they were seeing and hearing as a major failure.

Working together we can prevent the disruption of our vital and crucially important industry.

In 2005 the requirement for security exercises, similar to oil spill exercises, will go into effect. Next summer you can expect that the Coast Guard will begin boarding vessels and visiting with company security officers to ensure that security exercises of sufficient scope and detail have been held. To simplify this process for its members OMSA plans to hold group security exercises to coincide with regular OMSA quarterly meetings as a way to save members time and money. The planning for these exercises will begin in January. Your involvement will be greatly appreciated.

Navigation and Vessel Inspection Circular (NVIC) 10-04 contains guidelines for handling sensitive security information (SSI). While the NVIC is public information, all of the “real” information is contained in a SSI appendix, which must be requested separately by company security officers. According to regulations promulgated by the Transportation Security Administration (TSA), SSI includes such items as security plans and contingency plans; security directives; information circulars; performance specifications; vulnerability assessments; security inspection or investigative information; threat information; security measures; security screening information; and security training among other things.

Improper handling of SSI may result in serious civil penalty or other enforcement or corrective action. We expect that the Coast Guard will include examinations for violations of SSI protections in their vessel security inspections. As a reminder vessels security plans must be stored in a locked cabinet or container.

With the advent of vessel security, OMSA and other groups warned the Coast Guard that the methodology for dissemination of security information to vessels, their crews and company security officers was too cumbersome and too slow. Soon after the Coast Guard implemented its security programs OMSA , along with other associations, requested that the Coast Guard work with industry to develop a streamlined process for communicating security information. The Coast Guard has determined that the best way to speed up the information sharing process is to develop a web portal devoted to vessel security.

On September 1st the Coast Guard held a meeting in Washington where it announced its new marine safety web portal, Homeport, which will replace the Coast Guard’s existing online presence. The Coast Guard expects to have a beta version of the security section of the new site operational by the end of the year. The new system will display national and local MARSEC Levels and allow for secure, two-way communication between the Coast Guard and vessel security plan holders. Plan holders will receive a password and will be able to use the Web site to submit security plans for approval; make changes to contact information; maintain a secure copy of the vessel security plan; check plan review status; and advise the Coast Guard that the vessel has implemented a required MARSEC Level change. Users will also be able to access MARSEC directives without having to retrieve them directly from a Coast Guard office. OMSA is committed to working with the Coast Guard to develop this system so that it best meets the needs of out members.

At the July security officers meeting, the Coast Guard Vessel Security Inspectors training DVD was shown. OMSA has received permission from the Coast Guard to distribute this security training video to its members. If you would like a copy contact Ken Parris at (504) 734-7622 or email ken@offshoremarine.org. This is an excellent training device for your personnel and a must see for vessel personnel with security duties. This is the video the Coast Guard uses to train its personnel. The DVD is available through OMSA for a $30 charge to cover duplicating and handling costs.

These articles are intended for information purposes only. They are not intended to be a substitute for legal consultation with respect to any specific matter. For such opinion or advice, you should contact legal counsel. Please see your OMSA membership directory for the names of member firms.

In an unpublished decision, the U.S. Court of Appeals for the Fifth Circuit ruled that violation by a shipyard of the fire prevention regulation, while serious, was not willful. In the instant case, the shipyard did not install fire resistant tarpaulins under the welding site on a new barge. The shipyard did, though, use ventilators, respirators, and fire extinguishers, as well as pairing off each welder with a fire watch. The court held that such action, while insufficient to avoid a violation of the regulation, showed that the shipyard did not evidence an indifference to the requirements and an indifference to the safety of the shipyard employees, both of which are required to demonstrate a willful violation of the safety regulation. Trinity Industries, Inc. v. Occupational Safety and Health Review Commission, No. 03-60511 (5th Cir., July 23, 2004).

The U.S. Court of Appeals for the Fourth Circuit ruled that, under the Longshore and Harbor Workers’ Compensation Act (LHWCA), an employee who successfully prosecutes a claim for late payment of compensation is entitled to receipt of attorneys’ fees. In the instant case, the claimant and the employer settled the initial compensation claim. The employer was unable to deliver, within 10 days, to the claimant a payment of 20% of the total amount due, despite its alleged good faith effort. The claimant then sought and obtained a late payment award. The claimant then sought attorneys’ fees related to obtaining the late payment award. The employer argued that the late payment award was a penalty, not compensation, and that attorneys’ fees could only be awarded with regard to compensation matters. The court held that the late payment award was a monetary allowance payment and was more in the nature of compensation for the claimant than a penalty imposed on the employer. Newport News Shipbuilding v. Brown, No. 03-1480 (4th Cir., July 19, 2004).

Additional Insured May Have More Coverage Than Named Insured
The U.S. Court of Appeals for Fourth Circuit ruled that, in an appropriate case, an additional insured in a marine insurance policy may have more coverage than a named insured. In the instant case, a ship owned by plaintiff and operated by a ship management company was involved in a collision. Crewmembers of the other vessel sued the ship owner. The ship management contract required the ship management company to maintain insurance coverage listing the owner as an additional insured. The insurance policy utilized by the ship manager’s parent company covered the ship management subsidiary for “U.S. office exposures only”. The policy, though not specifically naming the ship owner as an additional insured, stated that it provided coverage to any additional insured to which the named insured was obligated by contract to provide insurance. The policy also contained specific endorsements providing the exact coverage required in the ship management contract. After the collision, the insurance company denied coverage for the ship owner, contending that the ship owner was not entitled to more coverage than the named insured. On appeal, the court held that the plain language of the insurance policy overcame any presumption that coverage of an additional insured does not normally exceed the coverage provided to the named insured. Seabulk Offshore, Ltd. v. American Home Assurance Co., No. 03-1320 (4th Cir., July 28, 2004).

Foreign Arbitration Awards Convention Trumps Jones Act
The U.S. Court of Appeals for the Fifth Circuit ruled that a mandatory arbitration clause in a maritime employment contract is enforceable despite the plaintiff alleging a personal injury claim under the Jones Act. In the instant case, plaintiff entered into an employment agreement with defendant company that led to his working as a barge leaderman on an offshore oil and gas project in Nigerian waters. The contract provided for mandatory arbitration of all disputes. After plaintiff was severely injured while working on the barge, he brought suit under the Jones Act and general maritime law. Plaintiff contended that the Foreign Arbitral Awards Convention Act exempts contracts of employment of seamen from its coverage and thus the arbitration clause should be unenforceable. The court held that, because the employment contract provided for the work to be performed outside the United States, the Convention applied and the Convention has no seaman exception. Freudensprung v. Offshore Technical Services, Inc., No. 03-20226 (5th Cir., August 9, 2004).

Pennsylvania Rule Not Applicable To Jones Act Cases
The U.S. Court of Appeals for the Second Circuit decided that the Pennsylvania Rule is not applicable to cases of seaman personal injury brought under the Jones Act. In the instant case, plaintiff’s decedent had been employed as a crewmember on defendant’s vessels. After leaving such employment, decedent was diagnosed with squamous cell carcinoma, for which he later died. Plaintiff brought suit against defendant, alleging that the cancer was due, in part, to decedent’s exposure to benzene and polycyclic aromatic hydrocarbons (PAHs) while working on the vessels. Plaintiff alleged that the level of benzene and PAHs on the vessels exceeded that allowed by Coast Guard regulations and, because of such alleged violation, the burden of proof should be shifted to defendant to show that such violation did not cause the cancer, in accordance with the Pennsylvania Rule. The court held that the Pennsylvania Rule was intended to address collisions and related maritime casualties and is not applicable to seaman personal injury cases such as this where the fact pattern is much more attenuated. Wills v. Amerada Hess Corp., No. 02-7913 (2nd Cir., August 11, 2004).

Source: This issue’s court cases were provided by:
Maritime Items, Author Dennis Bryant, Holland & Knight LLP, www.hklaw.com

Avoiding Electronic Discovery Disasters
The Federal Rules of Civil Procedure, particularly Rules 26 and 34, provide for the discovery of documents and things in litigation. Under these rules, electronic data compilations of every kind, such as active computer files, email messages and old data stored on backup tapes, are fair game for discovery.

The following “Golden Rules” are taken from the Jones Walker Litigation Report, Volume 1, Summer 2004.

1. Know What You Have. Litigants must have a clear understanding of exactly what electronic data they have on hand that is easily accessible and, therefore, likely to be discoverable at their own cost. Litigants also must understand that electronic data stored on backup tapes or other inaccessible media may take significant time and money to retrieve and review. Knowing what you have will aid you in devising (or updating) an appropriate retention policy and will help you respond timely and adequately when faced with a request for electronic data.

2. Devise and Maintain an Appropriate Data Retention Policy. Clients should have a specific data retention policy that dictates when, how and how often, electronic data is backed-up and later purged. This policy also should set forth specific procedures for notifying the party in charge of the system when litigation seems likely so policy implementation can be modified to avoid inadvertent destruction of potentially relevant information. Controls should be put in place to provide notice of the need to retain electronic data prior to or at the start of litigation. (Remember the Arthur Andersen destruction email?)

3. Discuss Electronic Discovery Issues at the Start of Litigation. When litigation starts, consider the electronic data requests you may confront in the case and other electronic discovery issues that may arise. Put your attorney in touch with your IT department early, so they can plan for and coordinate on electronic data issues. Discussing electronic discovery issues internally and with your attorney early will help you to devise an appropriate budget and strategy.

4. Contact the Opposing Party to Discuss Electronic Discovery. Discuss electronic discovery issues with the opposing party at the early stages of litigation. Trade information regarding your electronic data storage systems, your data retention policies, and your expectations regarding electronic discovery in each particular case. Additionally, discuss your expectations regarding the form in which requested data should be produced, address privilege waiver issues and consider entering a joint stipulation preventing inadvertent privilege waiver.

5. Be Creative. Consider how you can work with your opposing party on ways to lessen the burden (both time and money) of electronic discovery. For example, if your adversary requests information contained on voluminous backup tapes or on other inaccessible media, suggest that you conduct an initial review of a random sampling of such data to determine how much, if any, relevant information might be contained on the backup tapes. The results of such a sampling will help you to determine the relative utility of restoring and reviewing the full extent of otherwise inaccessible data. Be open to unique solutions to discovery related problems tailored to the facts…

The preceding excerpt from the Jones Walker Litigation Report was written by Corinne Giacobbe Hufft. Due to space constraints the entire article was not reprinted.

For more information on electronic discovery or a full copy of the article contact the Jones Walker firm (504) 582-8000 or www.joneswalker.com.

OMSA CO-SPONSORS OFFSHORE LOGISTICS CONFERENCE
OMSA invites you to participate in this conference and present a paper on what your company is doing to improve offshore logistics in the areas of: Facilitating Materials Handling, Security and Accountability, Personnel, Materials, Waste Reduction and Management, Regulatory Compliance, Customs, Immigration, MMS and Coast Guard Notifications, Safe Transfer of Personnel and Evacuation and Emergency Response. This is your opportunity to let a broad group know of your company. If you’d like to participate go to the website listed below and submit an abstract online. The IADC Offshore Logistics Conference, co-sponsored by OMSA, will focus on improvements in efficiency, safety and environmental protection in the movement of goods, supplies and personnel between onshore support facilities and offshore installations. Presentations will highlight current challenges, as well as recent developments. For more information go to www.iadc.org/offshorelogistics2005.html.

School Notes

HOUSTON MARINE
Houston Marine Offers STCW-Compliant Medical Care Training in New Orleans
Two programs in medical care training essential to deck and engineer license applicants will be held at the Houston Marine International Training Center in New Orleans in November, 2004. Coast Guard approved courses for Medical Care Provider and Medical Care Person in Charge will be conducted by Emergency Training Xcellence at the Houston Marine facility located at 5728 Jefferson Hwy, New Orleans, LA. In addition Houston has partnered with Alstom to offer a 4-day DP operators course. Contact Houston Marine at 1-800-947-7737 for more information.

SEA SCHOOL
Earlier this year Sea School began conducting its U.S. Coast Guard approved Apprentice Mate (Steersman) training course and program at the Bayou La Batre, Alabama campus. The program has been so well received by the near coastal towing industry that Sea School has decided to extend the offering of the Steersman program through the Sea School Jacksonville, Florida campus starting this month. The Steersman program is designed to take those mariners with the minimum qualifying service on towing vessels and set them on the ultimate career path to become a Master of Towing Vessels. The Coast Guard accepts the Certificate of Training from the Steersman course for an original license or for license renewal as Apprentice Mate (Steersman) of Towing Vessels, Near Coastal. In addition, Sea School assists towing companies with their wheelhouse training programs and Towing Officer Assessment Record (TOAR) programs, by offering a 1-day Designated Examiner Practical Assessment Training course. The Designated Examiner training is acceptable to the Coast Guard as satisfying the training requirements of NVIC 4-01 for towing vessel designated examiners.

CAPT Timmy Inc.
Regular Member (Tugs-Offshore)

Seagull America
Associate Members (Training Services)

Radio Holland USA, Inc.
Associate Member (Comm/Nav; Automation; Service & Sales)

Table of Contents

We acknowledge and thank the individuals and organizations that have contributed to this newsletter by submitting informative articles and/or granting OMSA permission to reprint material from their publications.

Hydraquip Corporation was founded in 1951 as a hydraulic equipment distributor, system designer, and fabricator. In 1985 we became an ESOP, which has allowed us to afford the highest quality personnel to service our customers. In the mid 90’s we opened our New Orleans office, which specializes in the Marine and Oil Patch industries. Our primary focus in these industries is:

• Marine System Integration
• Liftboat Jacking System
• Liftboat Planetary Gearboxes
• Steering System
• Ships Alarm and Monitoring System
• Central Hydraulic Systems
• Thruster Hydraulic Systems
• Hydraulic Automated Valve Systems
• Military Hydraulic Systems
• Field Service (24/7/365)

Hydraquip Corporation enjoys the strength and resources of a nation wide company, but we still consider ourselves as a neighborhood business. We use the single point of contact method for all of our projects. Hydraquip has risen to the top of our industry using a very old and simple business philosophy “Quality Is Free”. We remain committed to partnering with our customers to accomplish our common goals.

For more information about Hydraquip Corporation, you can visit our website: www.hydraquip.com