THE JONES ACT DILEMMA
ARE WE LOSING CONTROL OF OUR OCS?

In the previous issue of the newsletter, I issued a Code Red Alert concerning attacks on the Jones Act. I beg your indulgence in that I come to you, again, with a second missive concerning the Jones Act. I worry that perhaps we have become to complacent about the protection that is afforded our industry by U.S. cabotage laws and, if we do not become more alert to the subtle, as well as the flagrant violations that are occurring, we may ultimately lose control of our outer continental shelf and the commercial promise it holds for our U.S. companies.

The North Sea is in decline as an oil-producing region. As a direct result of this decline, among other reasons, foreign flag oilfield support vessels and construction equipment are searching the work for alternative places to work. The only thing that stands between you and a flood of both technologically competitive and, in many cases, cheap, under-regulated foreign flag equipment, are U.S. cabotage laws, including the Jones Act and U.S. towing statutes.

What a Strange World! It’s Us Against Us
American economists working for the U.S. government insist that foreign vessels with foreign crews can carry our cargoes for less. True. Multinational corporations tell us that foreign vessels with foreign crews can carry our cargoes for less. True. Farmers in the Midwest tell us that foreign vessels and foreign crews can carry their cargoes for less. True. However, we are thus presented with a dilemma.

In order to insure personal or public safety and protect the environment, the U.S. government has promulgated significant physical, technical and operational requirements on U.S. flag operators through the U.S. Coast Guard, DOL, EPA & MMS that make the American Shipbuilding industry and offshore merchant marine the most highly regulated in the world. Our workers in the shipbuilding industry and merchant marine are among the most highly paid in the world. As such, our “cost to do business” baseline is significantly higher than that of our foreign competitors. Yet, disappointingly, U.S. customers, alongside foreign interests, are actively supporting and promoting the incursion of foreign vessels into protected Jones Act markets in order to “save money”. (Yet, many of those same people would undoubtedly raise the roof if government import quotas or tariffs were legislated to favor foreign products over their own, or if the government subsidiaries that protect them were attacked.)

Foreign companies want into our domestic markets because they know, on cost alone, that they can completely overwhelm and eventually drive U.S. companies out of business due to the price and regulatory advantages they enjoy. Unfortunately, our government, because of conflicted standards and philosophy, and driven by a lack of interest or timidity in enforcing current protective legislation, or by following only a hyper technical interpretation of laws, is currently allowing or facilitating foreign incursions into our markets and too frequently ignoring the traditional principle of cargo and cabotage preference for U.S. flag vessels.

In essence, they are telling us that if we would welcome foreign flag vessels, and ignore the hundreds of substandard foreign vessel casualties that will now come with them each year and allow these poorly maintained, poorly regulated foreign vessels with poorly paid, poorly trained foreign mariners carry our domestic cargoes, we would be better served. In that case, the U.S. government and public’s insistence and argument for enhanced national security, better vessel design, more safely maintained, and better-manned U.S. flag vessels does not sustain itself and places U.S. operators at a clear and burdensome disadvantage.

Due to the fragmented nature of the regulatory function of our government, each issue must be addressed individually, often to multiple agencies or subdivisions of these agencies. These agencies or subdivisions, unfortunately, often focus on regulation for regulation sake. They lose sight of why we do what we do, and are largely uneducated in, or insensitive to cost considerations involved.

Because of this, we are losing and, to a large extent have already lost control of our greatest, emerging oil-producing asset, the U.S. OCS, to foreign controlled interests. Unfortunately, we are not currently engaged with our foreign competitors on an even playing field, even in our own back yard.

What the future Holds
In 1996, Congress passed the Deepwater Royalty Relief Act. By relieving operators of an obligation to pay royalties on the first 17.5 million barrels of oil (or oil equivalent) produced, Congress turned naturally risky, but potentially profitable ventures into more economically feasible projects, with exponential attraction to major oil companies. At $30 a barrel the first $500 million of oil could be produced royalty free. In 1992 there were only five producing deepwater fields. By 1997, one year after the passage of royalty relief, that number had grown to 16 projects, and by 2002, had grown to 65 producing deepwater fields. As of 2003, another 150 prospective deepwater development programs are anticipated.

The importance of deepwater field developments to the strategic interests of the United States can not be understated. While onshore and shelf production of oil declined by 410,000 barrels per day (bpd) from 1994 to 1998, deepwater production increased by 310,000 bpd. Onshore and shelf fields are considered mature. New discoveries onshore our shelf are relatively small and characterized by relatively low production rates. Hence, the decline in onshore and shelf production rates. Deepwater fields, on the other hand, are characterized by their large reservoir size and very high production rates. Deepwater fields are, also, primarily oil. BP alone projects it can deliver over 500,000 barrels a day (10 billion dollars a day at $20 per barrel. As of Feb. 26, the average price of oil exceeds $30 bbl.)

In 1999, deepwater Gulf of Mexico discoveries alone amounted to 60% of our Nation’s annual consumption of oil. MMS reports that the continuing pace of deepwater discoveries and projects will be sufficient to reverse the decline in domestic production of oil that has been in progress since 1985. In 1999, deepwater production of oil exceeded shelf production. In the next decade, experts expect deepwater oil production to add about 3 billion barrels per year to U.S. domestic oil production, leading to a net increase in domestic production of about 2 billion barrels per year. Ultimately, the deepwater OCS could deliver at least 40 billion barrels of oil. Yet, the bulk of the development dollars for contractor services and equipment related thereto will apparently flow primarily to foreign controlled corporations, to the detriment of the U.S. offshore marine contractors and U.S. offshore service providers.

The Growing Role of Foreign Assets and Companies on the OCS
As an example, we will illustrate the point through the prism of one deepwater project, the BP Horn Mountain development located in Mississippi Canyon Blocks 126 and 127, on the U.S. OCS. The project operator is BP, a foreign company. The discovery wells were drilled by the Ocean Victory, a foreign flag-drilling unit. The deepwater spar was designed by CSO Aker, a foreign company, and built in Finland, a foreign country. The spar was transported to the United States by a foreign vessel. The installation was accomplished by Heerema, a foreign company (which reportedly uses foreign tugs for its offshore construction projects). The production risers were designed by ABB Vetco Gray, a division of Europe’s ABB conglomerate. The pipeline was designed by Intec Engineering a division of Heerema and the pipeline installed by the Allseas Solitaire, a foreign pipelay vessel. The production pipeline connects to a Shell Oil (foreign corporation) pipeline, for delivery ashore. The only American major involvement in the project was the design and construction of the production facility topsides.

What’s In It For US?
How, then, within this discouraging chain of diminishing returns for U.S. owned/U.S. flag equipment from our OCS resources, are U.S. flag, Jones Act qualified operators specifically affected? In a more “perfect” world, we would at least expect to be assured of the employment of U.S. flag, Sec. 2 citizen owned, Jones Act qualified offshore service vessels to carry men, materials and supplies to offshore points within the U.S. Economic Zone (OCS). But it isn’t that simple. The line between “true” Jones Act qualified operators and “pretend” Jones Act qualified operators is becoming blurred. As indicated before, U.S. documented vessels, and U.S. shipyards, are the most highly regulated in the world. Our seamen are the most highly trained, highly regulated and best paid in the world. Our country, appropriately, has set the highest standards for our builders, our offshore maritime fleet and our personnel. And yet, in our own waters, on our own outer continental shelf, our greatest emerging source of domestic oil and gas, foreign vessels with foreign owners and foreign crews, built in shipyards with foreign government subsidies, subject to and beneficiaries of, generally, less stringent and/or expensive standards of construction, manning and inspection are allowed by our government not only to freely compete with our vessels, ostensibly except where the Jones Act or US cabotage laws apply, but to compete from an advantaged position, and now, apparently even in areas traditionally protected by the Jones Act and Towing statutes. Already, foreign seismic vessels are searching for oil, foreign drilling rigs are drilling for oil, foreign construction vessels are building offshore structures, foreign dive support vessels are supporting diving operations, foreign pipelay vessels are laying pipelines, and foreign tugs are moving these vessels and drilling units. Now, these same foreign controlled interests are intruding traditional Jones Act trades through clever manipulation of U.S. law and regulation.

They Take, and We Giveth Away
Over the past three years, for example, foreign owned and operated pipelaying companies have installed an estimated sixty percent of the value of pipelines laid in the U.S. outer continental shelf. Conversely, in the Norwegian and U.K. sectors of the North Sea, U.S. flag equipment is being altogether squeezed out by local governments and operators. They are doing this under the direction of foreign oil companies and due to advantaged, even discriminatory changes in the law. If a U.S. flag vessel should operate in those fields, crews are required to be nationals with the exception of the vessel’s Master and, on occasion, the Chief Engineer.

What is the potential impact to U.S. businesses of this trend, on the OCS and abroad? We are losing important and critical maritime related jobs, and millions of dollars in corporate revenues and U.S. government taxes. Direct revenue to American vessel operators has dropped sharply, in the millions of dollars, due to lost contracts. As indicated above, American vessels cannot compete on a $ for $ basis with vessels whose building and operating costs are significantly less. Wages to American seaman and offshore workers is lost when they are not employed on disengaged U.S. vessels or foreign flag offshore support vessels. Federal and State tax revenues are lost when American seaman and offshore workers are not employed, and U.S. companies earn less. Detailed analyses of the lost Federal and State tax revenues would require identification of all foreign flag vessels operating in the Gulf of Mexico, but initial estimates are that lost tax revenues would run into the million$ of dollars annually, and that is increasing annually, through corporate inversions and other means.

With the current downturn in the offshore industry (except for deepwater) several thousand offshore seamen and offshore workers are out of work. The Gulf of Mexico coastal States and Federal governments are spending $10’s of millions in unemployment benefits; food stamps and indigent medical care for these personnel and their families. Meanwhile, ironically, foreign vessels, with foreign crews are exploiting and developing our Outer Continental Shelf mineral resources, and no government agency monitors these foreign workers companies or knows exactly how many are at work on the nation’s OCS. And the number is growing.

The Dilemma
This, therefore, is the dilemma. There are two basic options: our government can either place American companies on the same level field as their foreign competitors; that is, subsidize our shipyards and revise the standard of regulation of our marine industries by the Coast Guard, OSHA, EPA, MMS, etc. but, in fact, our government is moving in the other direction. Alternatively, if the United States feels strongly about maintaining the higher standards that have been set for our marine related industries, then our government should apply the same standards to all vessels, especially flags of convenience, working on the U.S. Outer Continental Shelf, starting immediately with the requirement to hire U.S. citizens or legal resident aliens, meanwhile requiring foreign vessels to comply with equivalent U.S. regulations that our vessels must comply with to operate on the OCS. Finally, our government, and their responsible agencies should, above all, avoid, whenever possible, the issuance of Jones Act waivers to foreign equipment. These government agencies should incline to strictly interpret the Jones Act and other cabotage rules. And in any case, at the very least, our government should, in the future, require all offshore oil or gas producers to provide information, probably through MARAD, in sufficient quality, quantity and timeliness to allow U.S. vessel operators the time to produce or build vessels that can compete in currently protected Jones Act trades.

Looking, Thinking and Planning Ahead
The current process whereby offshore operators announce a project well into its development cycle, and then request waivers of U.S. carriage requirements due to non-availability of suitable equipment is subject to discrimination, manipulation and is unacceptable. Offshore operators are, either unwittingly, or by calculation, stacking the deck against U.S. vessel operators by delaying the announcement of vessel support needs until it is too late for U.S. operators to build the necessary equipment. Without a contract in hand, U.S. operators will find it difficult to build vessel or tonnage capacity on mere speculation that a contract may someday be had. The development of an offshore field has a relatively long cycle time. These are multibillion-dollar projects. But even with the enormous total expense of a project there may be an economic incentive (temptation) for these major companies to further reduce development costs and optimize profit by utilizing as much less expensive foreign equipment as possible.

By failing to involve American vessel operators and builders at the initial planning stages of a project, by the time specialized construction or delivery equipment is needed it is too late for the design and construction of U.S. flag, Jones Act qualified, equipment. They will therefore argue there is justification for a Jones Act waiver. No one can then object to the waiver, because the American equipment is not available. What we have is an economic “Catch 22”. This is a benefit to the end user as they are then able to use significantly cheaper foreign vessels. The cost advantage of foreign vessels is so great that even some U.S. companies are now re-flagging their equipment foreign. American equipment will simply not be built on speculation. The current competitive and political climate and on the U.S. OCS favors foreign competition to the disadvantage of loyal, U.S. operators. This is due, as indicated previously, to the cost of design and operation of U.S. equipment as a result of higher standards and regulation for of U.S. equipment and relatively free pass given to foreign equipment.

To date, MMS data indicates that there are over 160 deepwater discoveries in the Gulf of Mexico. Of the discoveries only 65 are currently developed or in development. That means that there are about 100 current discoveries that offshore producers are additionally planning to develop and produce, at significant profit in the near to intermediate future. These are multi-billion dollar projects that require intense advance planning and preparation. And yet, we hear little, if anything, in advance, regarding the anticipated vessel support requirements of these projects until it is virtually too late or too costly to react and compete. We contend there is, in fact, sufficient lead-time to build U.S. support vessels, and we are prepared to do so. However, the offshore producers (and users) are generally not providing advance information to the U.S. support vessel community relative to their future needs. This failure to provide timely notification of project needs ensures that the project can be developed using cheaper foreign vessels, and crews, saving thousands of dollars and the huge liability headache of U.S. equipment on a multi-billion dollar project.

We’re Sick and Tired – and We Ain’t Gonna Take It Anymore!

OMSA is taking aggressive action to defend the Jones Act and to tighten loopholes recently employed to distinguish the protection relied upon from our cabotage laws. We are also taking steps so that U.S. vessel operators are, in the future, given adequate notice and contracts in order to plan and act to provide equipment needed for future OCS development. Whether it is through legislation or through the friendly persuasion of the bully pulpit, we need to strike a partnership between the developers and builders of strategic offshore petroleum production facilities and the U.S. vessel operating community. At the conceptual design stages of a project, when the general size, shape and weight of a facility are known, information on transportation and construction vessel needs should be transmitted to MARAD, and through MARAD, to the U.S. vessel operating and building community. At least one major company has shown an honest interest in discussing the problem, with a view to exploring the issues which are important to our U.S. flag operators. This cooperation would, at least, give U.S. companies the opportunity to compete for the business. Whenever possible, contracts for equipment should, in the future, be proffered in a timely fashion and negotiated so that vessel operators can obtain appropriate funding.

In summary, U.S. government policies need to be reviewed, amended and/or promulgated that will return dominance to U.S. offshore service contactors operating on the Gulf of Mexico OSC by creating a level playing field for U.S. vessel operators and workers. They can begin by strongly monitoring and enforcing the U.S. Jones Act and related cabotage laws.

In May of 2001 OMSA sent a letter to the U.S. Customs Service Carriers and Rulings Branch outlining our position that recent interpretations by the Customs Service related to certain towing operations on the OCS were arguably too liberal. As a consequence of these rulings, OMSA has noted a remarkable upswing in the presence of foreign flag towing activity on the OCS in support of offshore drilling and construction. These activities must be more closely monitored and scrutinized with respect to whether or not they properly adhere to the provisions of the Jones Act and towing statutes. With the addition of language in Section 404 of the “Omnibus Maritime and Coast Guard Improvements Act of 2002,” apparently strengthening the statutory language requiring U.S. Jones Act qualified vessels be used for assistance towing operations that originate or terminate at a point or place in the U.S. it is imperative that we persist in our efforts to convince Customs of the need to more closely monitor offshore towing operations, and to interpret our statutes and regulations constructively, in favor of U.S. operators and consistently with the spirit of the Jones Act and cabotage laws.

SUMMARY

In 1979, - repeat, 1979 a prominent executive from the U.S. offshore industry testified as to the growing influence and level of participation on the emerging U.S. OCS by foreign controlled corporations, who effectively leveraged their innate advantage over U.S. operators as a result of their control of less expensive equipment and workers. The growth, in the beginning, was gradual, but steady and, today, it is remarkable and disconcerting.

The Chairman of the Select Committee receiving the testimony inquired of the businessman:
“Does the problem get worse as we go along, as time goes on? I mean is this something that people (foreign corporations) are going to discover and try to exploit to your (American companies) further disadvantage, do you think?”

The gentleman responded: “Well, I think we have to give our (foreign) competitors in this industry credit for being shrewd businessmen. And whether they are a U.S. owned competitor or a foreign owned competitor, and they have been able to find that they are experiencing an advantage, that has to give them a leg up… I would expect they would continue to follow up on that advantage.”

CONCLUSION

The gentleman’s observation was prophetic. Foreign competitors have discovered the advantage, and, today they are following up on it very aggressively.

We, therefore, must now stem the tide by any and all means legally and politically available to us.

LILLIE (EDEN) LICCIARDI – 25 YEARS OF OMSA

On April 15th 1978, Lillie Eden joined OMSA, taking a temporary position of secretary in a three-person office. Twenty-five years later, she is, thankfully, still with us. In 1978, the association Executive Director was William Mayberry and the offices were located in the New Orleans World Trade Center. Since joining OMSA, Lillie, the “grand ole dame” of OMSA, has seen the offices move to the Tidewater Bldg. and our current location in Harahan.

Lillie has become our corporate memory. She knows the who, the what, the where, the when and the why of OMSA. Her recall of people and companies is astounding, and we couldn’t get along without her. We at OMSA want to say thank-you to Lillie (Eden) Licciardi for her twenty-five years of dedication and service to the marine industry. When you see her at the next meeting or call on the phone, please let her know just how much we really appreciate her years of service, and if your nose isn’t running, give her a hug!

ANDY BRAUNINGER RESIGNS OMSA CHAIRMANSHIP
Andy Brauninger, former President of Seabulk Offshore, has resigned his post as Chairman of the Offshore Marine Service Association where he had very ably represented Seabulk Offshore and the industry at large over the past few years.

Andy Brauninger, always a gentlemen and a highly respected colleague, for his knowledge of the industry, professionalism and, above all, his integrity, served the members of our industry and association well during his tenure as Chairman of OMSA.

Andy will undoubtedly remain active in our industry and, we are confident will continue to support our organization wherever and whenever he can. We wish him and Marlene, our best, and look forward to the privilege of working with him again.

Andy Brauninger will be replaced as Chairman of the Board of OMSA by Milt Rose, President of Seacor Marine Inc. Milt has been serving as Vice Chairman and will succeed Mr. Brauninger as Chairman as of April 29, 2003. OMSA will continue to be in good hands.

CHARLES BURRELL, A.K.A. “STOGIE” BURRELL

I will miss my good friend, Charlie Burrell. Charlie retired a few months ago after a long and active career with Leevac Marine and Leevac Shipyards.

Charlie and I go way back! Back to the days when OMSA was GOMSA (only the Gulf Offshore Marine Service Association, back then) and the organization was comparatively small. Smaller, but active as always.

Charles Burrell was a dedicated and active member of the Board of Directors, and served the association as its Secretary/Treasurer for many years. He has been a good and loyal friend, always a helpful and supportive colleague, and a terribly good sport. I use that word with special meaning, because I really did do terrible things to Charlie in the name of OMSA fun and recruiting, including making him into a cross dresser at one meeting, along with the late Tillman Esteve of Bollinger Shipyard fame. What a pair! Yep. Good friend. Good Sport. Good Samaritan.

Charlie and his lifelong companion, Janne, a charming lady still, notwithstanding over thirty-one years of hard living with Charlie will play out their retirement in Jennings, LA. We wish them well, and we hope they’ll stay in touch and visit with their many friends of OMSA when the opportunity presents itself.

THE NEXT MEETING OF YOUR ASSOCIATION WILL BE HELD TUESDAY, APRIL 29, 2003.

SCHEDULE & LOCATION of MEETINGS
HILTON NEW ORLEANS RIVERSIDE
Poydras at the Mississippi River
New Orleans, LA

I. COMMITTEE MEETINGS: 10:00 A.M. - 12:00 Noon (Grand Salon A – 1st Floor)

II. Special Presentation: 12:00 – 2:30 P.M. (includes Luncheon) “The Offshore Information Gateway”
OMSA member BOATRACS, Inc. will be making a special presentation of its integrated information system titled “THE OFFSHORE INFORMATION GATEWAY”.

III. GENERAL MEMBERSHIP MEETING: 3:30 - 5:30 P.M. (Napoleon Room – 3rd Floor)

IV. COCKTAILS: 5:30 - 7:00 P.M. (Versailles Room – 3rd Floor)

V. DINNER: 7:00 – 9:00 P.M. (Napoleon Room – 3rd Floor)

SPEAKER - Professor Peter Ricchiuti:
Subject: Market (Oil & Gas) Signals: “Oil’s Well That Ends Well”

	Table of Contents
The 2003 Omsa April Golf Classic	Table of Contents
The 13th Annual OMSA April Fool Golf Classic is scheduled to take place at Chateau Golf & Country Club, 3600 Chateau Blvd., Kenner, LA. This year, we again have two hotels providing accommodations. The Hilton Garden Inn at 4535 Williams Blvd., (504) 712-0504 in Kenner, LA is located minutes from Chateau Golf & Country Club with rooms at $89 (single/quad occupancy). Or you may choose the Hilton New Orleans Riverside at Poydras & the River (504) 584-3999, which will be the site of the OMSA 2nd Quarterly meeting the day after the tournament. Rooms are available at $189 for classic single/double rooms and $239 for towers. A special thanks – a very special thanks to our wonderful Associate and Regular Member SPONSORS who make this Tournament possible. Please call if you are interested in sponsoring, providing ditty bag items or a drawing prize. Winners of drawing prizes must be present. Golfer registration has been fantastic. The morning tee time (8:00 AM) has room for 5 teams, the afternoon tee time (1:30 PM) has sold out. A waiting list has been formed in the event of the inevitable last minute changes. Don’t forget, you don’t have to register in teams, individuals may also register! OMSA 2003 APRIL GOLF CLASSIC SPONSORS BOLLINGER SHIPYARDS, INC. Hole #1 Longest Drive Hole $200 Edwin Watts Gift Certificate KONGSBERG SIMRAD Hole #2 INTERNATIONAL MARINE SYSTEMS Hole #3 STEWART & STEVENSON SERVICES Hole #4 CONRAD INDUSTRIES Hole #5 MARINE SYSTEMS Hole #6 EASTERN SHIPBUILDING Hole #7 Closest to the Hole $200 Cash GREEN MARINE & INDUSTRIAL EQUIPMENT COMPANY, INC. Hole #8 GULF COAST CATERPILLAR DEALERS (Louisiana Power Systems, Thompson Power Systems, Puckett Machinery and Caterpillar, Inc Hole #9 LYTAL MARINE Hole #10 STRASBURGER & PRICE, LLP Hole #11 Hole-in-One BREAUX BROTHERS ENTERPRISES Hole #12 BAYOU STATES MARINE & INDUSTRIAL SUPPLY Hole #13 HORNBECK OFFSHORE OPERATORS, LLC Hole #14 BATES UNLIMITED & ASSOCIATES Hole #15 Closest to the Hole $200 Cash LABORDE MARINE & LABORDE MARINE LIFTS Hole #16 EDISON CHOUEST OFFSHORE Hole #17 AON RISK SERVICES OF TEXAS Hole #18 OMSA 2003 APRIL GOLF CLASSIC SPONSOR LIST – GOLF EVENTS BENDER SHIPBUILDING & REPAIR CO., INC. Shirt Sponsor GRAHAM GULF / C&G BOAT WORKS Shirt Sponsor INSULATIONS INCORPORATED Shirt Sponsor ASCO USA, LLC Shirt Sponsor OPEN Golf Carts BEIER RADIO Putting Contest BEIER RADIO Driving Range Contest GULF COAST CATERPILLAR DEALERS (Louisiana Power Systems, Thompson Power Systems, Puckett Machinery, and Caterpillar, Inc.) Cochon de Lait KARL SENNER, INCORPORATED Beverage Cart CUMMINS MID-SOUTH, INC. Beverage Cart BREAUX BROTHERS ENTERPRISES Beverage Cart ZF MARINE Beverage Cart NREC POWER SYSTEMS, INC. Turnstand LEMLE & KELLEHER Shelter House/Cabanas GLOBAL POWER SYSTEMS Shelter House BBQ GULF COAST CATERPILLAR DEALERS (Louisiana Power Systems, Thompson Power Systems, Puckett Machinery and Caterpillar, Inc.) Breakfast, Lunch, Cocktails & Dinner HIBERNIA NATIONAL BANK Breakfast, Lunch, Cocktails & Dinner OTTO CANDIES, L.L.C. Breakfast, Lunch, Cocktails & Dinner BREAUX’S BAY CRAFT, INC. Breakfast, Lunch, Cocktails & Dinner CANAL BARGE COMPANY Breakfast, Lunch, Cocktails & Dinner GULF COAST CATERPILLAR DEALERS (Louisiana Power Systems, Thompson Power Systems, Puckett Machinery, and Caterpillar, Inc.) Flight Prizes McDONOUGH MARINE Trophies – Platinum Category SEACOR MARINE, INC. Trophies – Platinum Category SEABULK OFFSHORE, LTD. Trophies – Platinum Category JOHN BLUDWORTH SHIPYARD, LLC Trophies – Platinum Category CUMMINS MID-SOUTH, INC. Trophies – Gold Category SOUTHERN STATES OFFSHORE Trophies – Gold Category OMSA 2003 APRIL GOLF CLASSIC SPONSOR LIST – SPECIAL EVENTS/DRAWING PRIZES/AWARDS SOUTHWEST AIRLINES Kenner, LA Two Open Dates, Open Destination, Airline Tickets HILTON NEW ORLEANS RIVERSIDE New Orleans, LA Deluxe Accommodations for two nights HOLIDAY INN SELECT New Orleans, LA Complimentary Weekend for Two BRENNAN’s RESTAURANT New Orleans, LA $100 Gift Certificate Le PAVILLION HOTEL New Orleans, LA Lunch for two in the Crystal Room La RIVIERA RESTAURANT $30 Gift Certificate (lunch) THE RITZ CARLTON New Orleans, LA A Brunch for Two GALIANO TUGS, INC. Cut Off, LA $100 Emeril’s Gift Certificate $100 Ruth’s Chris Steak House FINANCIAL SERVICES TRANSAMERICA EQUIPMENT Houma, LA A PING Putter AMERICAN BUREAU OF SHIPPING (ABS) Harahan, LA $100 Gift Certificate from Copeland’s CANAL BARGE COMPANY New Orleans, LA “Shoulda Gone Fishin” Award Rod & Reel Combos for four CATERPILLAR FINANCIAL SERVICES CORPORATION Nashville, TN Caterpillar Jacket OMNISTAR, INC. Houston, TX Four $50 Edwin Watt’s Gift Certificates Four Dozen Golf Balls ALARIO & ASSOCIATES, L.L.C. Harahan, LA $100 Restaurant 1179 Gift Certificate JOHNNY’S PROPELLOR SHOP Morgan City, LA Edwin Watt’s Gift Certificate ($50) STEWART & STEVENSON Harvey, LA 12 Golf Umbrellas 25 Golf Towels OCEANIC FLEET Boutte, LA Large Igloo Ice Chest & Folding Chair(s) MONTCO OFFSHORE Golden Meadow, LA Panoramic View Binoculars from Restoration Hardware OMSA Harahan, LA $100 Mr. B’s Gift Certificate $50 Houston’s Gift Certificate $100 Restaurant 1179 Gift Certificate Two Stadium Chairs Vector Deluxe Travel Cooler/Warmer OMSA 2003 APRIL GOLF CLASSIC DITTY BAG CONTRIBUTORS Adams & Reese LLP Baker Lyman & Company Bates Unlimited Bayou States Marine & Industrial Supply Coastal Marine Equipment, Inc. First Wave Marine International Marine Systems John-Henry Enterprises Lytal Marine Operators McElroy/Catchot Winch Company OMSA Stewart & Stevenson Wartsila North America, Inc. THANKS TO OUR OMSA 2003 APRIL GOLF CLASSIC VOLUNTEERS Chuck Freeman – Electronic Design, Inc. Bronwyn Picolo – John-Henry Enterprises, Inc. Nancy Nelson – Sea School Sharon Stoskopf – Stoskopf-Draper Productions Cherie Ursin – King, LeBlanc & Bland
OMSA – 5TH ANNUAL CAJUN TROPICS FISHING RODEO	Table of Contents
Take note OMSA fishermen! This year’s Cajun Tropics Fishing Rodeo festivities and weigh-in have been moved to the CYPRESS COVE MARINA AND LODGE, Venice, Louisiana 70091. We will begin the festivities on Friday, June 20th with a Cajun Tropics Social. Saturday, June 21st will be the Fishing Tournament Day with fisherpersons out at safelight and returning to weigh-in per the scheduled times. Registrants may launch from any marina, but must return to Cypress Cove Marina for weigh-in. Cypress Cove provides a Lodge, Marina, Club House, and Bar & Grill for our convenience. Cypress Cove Lodge is providing OMSA participants a special rate of $65 per night (plus tax). DATE: June 20th & 21st RODEO HEADQUARTERS: CYPRESS COVE MARINA 226 Cypress Cove Road Venice, LA 70091 PHONE: (800) 643-4190 or (985) 534-9289 FAX: (985) 534-9761 WEIGH-IN-SITE: CYPRESS COVE MARINA MOTEL: CYPRESS COVE LODGE 235 Cypress Cove Road Venice, LA 70091 PHONE: (888) 534-8777 or (985) 534-7777 FAX: (985) 534-9002 E-Mail cclodge@bellsouth.net CAJUN TROPICS SOCIAL: Friday, June 20th, Seafood Buffet Cypress Cove Club House/Marina 7:00 to 11:00 PM $ 35 Per Person TOURNAMENT HOURS: Saturday, June 21st Safe Light till weigh-in per schedule Please join us for the 5th Annual OMSA Cajun Tropics Fishing Rodeo. We will “launch” the Rodeo with a Cajun Tropics Social (seafood buffet, beer and fun) Friday evening, June 20th at 7:00 PM at Cypress Cove Club House at the Marina. The rodeo is open to all OMSA members and their guests. OMSA will sponsor two special Rodeo Grand Prize Drawings in the amount of $1,000 and $500 to be presented at the awards banquet Saturday evening. A buffet dinner will be provided between 5:30 & 7:00 PM. Awards and prizes will be given following dinner. All fishing registrants will be eligible for these cash prizes (need not be present for cash prize drawings). Other drawing prizes, i.e. ice chests, fishing rods, etc… require that winners be present. At safe light, Saturday, June 21st we will “throw out our lines”. Anyone who manages to catch a fish should be back for weigh-in per times outlined on the registration. ALL RODEO PARTICIPANTS MUST BE PRE-REGISTERED (fishing licenses are required as per state/federal law). Remember, accommodations and charter boats are limited, so make reservations in advance. Details regarding Cypress Cove Lodge & Marina facilities can be found at www.cypresscove.net. Capt. Bobby Dugas is the contact person to help arrange charters in Venice at (985) 564-2170 or www.bccharters@webtv.net. If you need to make arrangements for your boat, please contact Cypress Cove Marina (985) 534-9289. Michael Ballay is the Harbor Master. If they cannot accommodate you, please call Mitzi Ray (504) 734-7622 or by e-mail mitzi@offshoremarine.org for assistance. Copies of the registration form may be made for additional registrants. A separate form is provided for sponsorships. The tournament committee invites you to support and participate. All types of door prizes are welcome. REGISTRANTS MUST BE PRESENT TO WIN DOOR PRIZES (EXCEPT THE $1,000 AND $500 OMSA DRAWING). All sponsors will be recognized on the sponsor board at tournament headquarters and in the OMSA quarterly newsletter. If you are interested in sponsoring/donating a drawing prize, please contact our rodeo prize coordinators, Chuck Freeman of Electronic Design (EDI) (504) 427-9008 or Mitzi Ray (OMSA) (504) 734-7622. CURRENT 2003 RODEO SPONSORS: LEEVAC INDUSTRIES FISH FRY SPONSOR BENDER SHIPBUILDING FISH FRY SPONSOR BOLLINGER SHIPYARDS PLATINUM SPONSOR Sponsorship Selection: (1) Marina Sponsor - $2,000 Receives Four Fishing Registrations, Banner on Marina Balcony & Four Friday Night Dinner Tickets. Additional Fishing Registrations $ 75. (2) PLATINUM SPONSOR - $1,500 Receives Three Fishing Registrations, maximum size listing on Sponsor Board & Three Friday Night Dinner tickets. Additional Fishing Registrations $ 80. (3) Fish Fry Host - $1,200 Receives Two Fishing Registrations, & Two Friday Night Dinner Tickets. Additional Registrations $90 (4) Entertainment / Cocktails Sponsor - $1,200 Receives Two Fishing Registrations & Two Friday Night Dinner Tickets. Additional Registrations $90. (5) GOLD SPONSOR - $ 1,000 Receives Two Fishing Registrations, Listing on Sponsor Board. Additional Fishing Registrations $100. (6) SILVER SPONSOR - $ 750 Receives One Fishing Registration Listing on Sponsor Board. Additional Fishing Registrations $110. (7) Weigh Master Sponsor - $ 600 Receives Two Friday Dinner Tickets. Sign at the Weigh-In area and Results posted on it. (8) SPONSOR - $ 350 Receives One Friday Ticket. Listing on Sponsor Board. (9) Drawing Prizes Provided by Donor Listing on Prize Board YO! OMSA SPONSORS & VOLUNTEERS WE LOVE YA!
	Table of Contents

TO ACCESS THE MOST CURRENT INFORMATION ON LEGISLATION LISTED IN THIS SECTION GO TO THE THOMAS LEGISLATIVE WEB PAGE AT HTTP://THOMAS.LOC.GOV/ AND ENTER THE BILL NUMBER IN THE ARTICLE.

Offshore operators now have one more thing to consider when arranging for towing services for U.S. port entry. Under legislation recently passed by the Congress and signed by the President, non-U.S. vessels are prohibited from providing towing assistance to vessels in the navigable waters of the United States. Section 404 of the “Omnibus Maritime and Coast Guard Improvements Act of 2002,” which was tied to the “Maritime Transportation Act of 2002” (107th Congress bill S1214) states that, except for vessels in distress, only a vessel of the United States may perform the following vessel escort operations: (1) Operation or assistance that commences or terminates at a port or place in the United States; (2) Operation or assistance required by U.S. law or regulation; and (3) Operation provided in whole or in part for the purpose of escorting or assisting a vessel within or through navigation facilities owned, maintained, or operated by the United States Government or the approaches to such facilities (other than the St. Lawrence Seaway). Violation of the law carries a civil penalty of up to $10,000 per day for each day of violation.

In this section, the term escort vessel means any vessel that is assigned and dedicated to assist another vessel, whether or not tethered to that vessel, solely as a safety precaution to assist in controlling the speed or course of the assisted vessel in the event of a steering or propulsion equipment failure, or any other similar emergency circumstance, or in restricted waters where additional assistance in maneuvering the vessel is required to ensure its safe operation.

Editors note: OMSA towing operators should take note.
For more information, contact Ken Parris at (504) 734-7622

On November 26, 2002, the President signed into law the Terrorism Risk Insurance Act (TRIA) of 2002. TRIA became effective immediately, which meant that terrorism exclusions on existing insurance policies were removed and all policy holders had the ability to secure coverage for terrorism risk. TRIA establishes a temporary Federal Program of shared public and private compensation for insured commercial property and casualty losses resulting from acts of terrorism. TRIA effectively places the Federal government temporarily in the terrorism risk reinsurance business as the Program will sunset on December 31, 2005. The Federal reinsurance backstop for terrorism risk insurance established under TRIA is based on the concept of an insurance company deductible and excess loss sharing with Federal government. Another key aspect of TRIA is the authority for the Treasury to recoup Federal payments under the Act via policyholder surcharges. There are both mandatory and discretionary aspects of the Treasury’s recoupment authority.
Other key provisions of TRIA:
• Limit the definition of “act of terrorism” to include only acts of terrorism that are related to foreign sources;
• Require mandatory participation in the Program for a defined group of insurers;
• Require insurers to “make available” coverage for acts of terrorism on terms and conditions that do not differ materially from the terms, amounts, and other coverage limitations applicable to other events;
• Require Federal payments insurers make certain disclosures regarding the Program to their policyholders;
• Limit the Program to commercial property and casualty insurance; and
• Provide for specific procedures (e.g., claims consolidation) that are designed to manage litigation arising from or relating to acts of terrorism.

To assist the insurance industry in complying with TRIA, the Treasury has issued three Interim Guidance notices. Interim Guidance provides the Treasury the ability to respond promptly to implementation difficulties and to prevent confusion prior to the issuance of formal regulations.

On December 3 the first Interim Guidance was issued, which addressed: first, disclosures to policyholders under TRIA sections 103(b)(2) and 105(c), and how insurers could be deemed to be in compliance; second, how the “make available” requirement would be interpreted and how insurers could comply; and third, what lines of insurance are covered by TRIA, and how they can be identified through current NAIC reporting requirements.

On December 18 second Interim Guidance was issued, which addressed: first, what entities must participate in the Program, outlining TRIA’s requirements for such entities, and how their affiliates will be treated under the Program; second, the scope of geographic coverage under the Program; third, the various categories of entities that meet TRIA’s requirements to participate in the Program and how they may estimate their deductible under the Program; and fourth, additional guidance on complying with disclosure requirements.

On January 22 the third Interim Guidance was issued, which addressed: first, the timing and method of satisfying the required disclosures; second, further clarification on how entities are to certify compliance with the disclosure requirements; and third, questions concerning non-U.S. insurer participation in the Program. Keep an eye on the Federal Register for further developments.

What is HIPAA? It is a law passed by Congress in 1996, which becomes effective April 14, 2003. It was enacted to combat waste, fraud and abuse, improve portability of health insurance coverage, and simplify administration of health care. HIPAA is a federal law that everyone must follow. What does HIPAA do? It requires doctors, hospitals, health plans, and others to protect their patients' medical information. HIPPA intends to improve the portability of health insurance coverage during events such as changing or losing jobs, pregnancy, moving, or divorce. It also gives patients the right to restrict certain uses of their protected health information (physical and mental conditions, age, ethnicity, and other personal statistics). Who is affected by HIPAA? Everyone who receives medical care. What do I have to do? Nothing at this point. The next time you go to the doctor, you will be asked to sign a form acknowledging that you received notification of your rights under HIPAA. Your signed acknowledgment in no way affects the care you receive. If for some reason you are opposed to signing the acknowledgment-that is your right. The nurse will make a note that you refused to sign the form, but that you have been made aware of HIPAA. What has changed about the delivery of health care under HIPAA? Patients have the right to a higher level of control in regards to their personal information. The two most important examples are: patients may request a copy of their medical records for their review, and they may request that anyone who maintains their medical records provide a list of those to whom their records have been disclosed. Other examples include: requesting that the doctor's office only call you on a specific phone line and not leave a message if you do not answer; that appointment reminders be sent in envelopes rather than postcards; and that a hospital not discuss your medical conditions with certain people. What has remained the same under HIPAA? Doctors, hospitals, insurance agents, and others involved in the delivery of health care may continue to share patients' personal information for the purposes of treatment, payment, and other health care operations.

Are there other resources of information about HIPAA? Yes. Try any of these web sites:
http://www.hipaaplus.com/
http://cms.hhs.gov/hipaa/online/default.asp

• The bill establishes local port security committees to integrate the myriad federal, state, local and private law enforcement agencies overseeing the security of the international borders at America's seaports.
• The legislation mandates a regional Area Maritime Transportation Security Plan and directs all ports, facilities and vessels to draw up comprehensive security and incident response plans.
• The Act directs the U.S. Department of Transportation to develop specific regulations to secure ports and limit access to security-sensitive areas through background checks and the issuance of transportation security identification cards.
• The bill also restricts firearms and other weapons at U.S. ports and dictates that ports conduct background checks of employees working in security-sensitive areas.
• Seafarers will be required to carry acceptable identification.
• The measure requires ships to electronically send their cargo manifests to a port before gaining clearance to enter, and prohibits the unloading of improperly documented cargo.
• The legislation directs the Secretary of Transportation to assess the antiterrorism measures maintained by foreign ports and permits U.S. ports to deny entry to vessels that call on ports without effective antiterrorism measures.
• The bill also authorizes the Coast Guard to board ships entering U.S. ports in order to deter highjackings or other terrorist threats.
• To date, there has been no provision of funds by Congress to implement the Act.

SECTIONS OF PARTICULAR INTEREST TO OUR MEMBERS ARE SPECIAL, PRIVATE PROVISIONS ADDED AT THE LAST MINUTE BY SPECIAL INTERESTS.

• One provision waives the Jones Act and allows an offshore operator to use foreign flag launch barges in the construction of several deepwater production facilities.
• In a second provision of note, the Jones Act was waived to allow foreign flag shuttle tankers to operate between deepwater Gulf of Mexico production facilities and U.S. refineries if U.S. flag shuttle tankers are not available.
• A third amendment revoked a proviso that would have discouraged corporate inversions.

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The U.S. Coast Guard issued a Notice stating that it has suspended renewing and issuing Merchant Mariners' Documents (MMDs) using the previously issued form and has begun renewing and reissuing MMDs using a new form. The new MMD form is more tamper-resistant and facilitates verification of an MMD holder's identity, citizenship, and qualifications to work aboard U.S. flag vessels. Use of the new form began on February 3, 2003. Prior to the issue of one of these “new” MMD’s a mariner must report to the local Regional Exam Center for a positive identification with two forms of identification and undergo a criminal background check and National Driver Registry check before the MMD can be issued. This process will take longer than before and there will be “NO” same day service on MMD issue.

What does the above mean to Marine Employers, Maritime Schools and Merchant Mariners? First, no REC will be able to issue any MMD on a “same day” basis, i.e. for a duplicate of a lost MMD. REC’s must submit mariner information for criminal record review before they are permitted to issue an MMD. Once the review is complete, issuance of the MMD will pend the “normal” delays, i.e. National Driver Registry check, review of errors in the application, etc. For any applicant not holding US citizenship, the time consuming procedures that began on 23 December 2002 remains in effect. The procedures listed below are for US citizens applying for an MMD.

For an original MMD (first ordinary seaman, or if never held an MMD, the first QMED or A/B) a mariner must appear in person at the REC to take their oath, be positively identified, and for fingerprint cards to be prepared. No one other than an employee at the REC can prepare a fingerprint card for any mariner (MMD or license applicant). To speed processing, a school or employer may help a mariner fill out the top portion of the fingerprint card to be brought to the REC for the actual fingerprinting. For a marine employer or a school desiring to send a group of mariners for original MMDs, please call (504) 240-7300 extension 251 to schedule an appointment. For single O/S applicants, the current process of coming into the REC without an appointment will continue. For single A/B or QMED applications, the mariner should come to the REC without an appointment for fingerprinting and oath. Note - the application will NOT be evaluated immediately; the mariner will be notified later with the results of the evaluation. All mariners must have two pieces of identification and their completed application to be submitted when their fingerprints are taken. Acceptable ID includes passport, driver’s license, US military ID, federal employee ID badge, Law Enforcement credentials, INS Green Card, state non-driver ID, birth certificate, and Merchant Mariner’s Document (MMD/z-card) but only if issued after 3 FEB 2003. If a mariner does not have two photo IDs, at least one photo ID plus one other form of ID is required such as a birth certificate, or Indian tribal enrollment card. The mariner and their employer should plan ahead as the criminal record review will take time to process.

For renewal MMDs, applications are still submitted by mail or dropped off and will be returned by mail or picked up as the mariner prefers, but the MMD will not be issued until the results of the reviews have been received, the applicant is positively identified, fingerprints taken, and the old MMD turned into the REC. The return of the MMD and fingerprinting may be done either at the beginning or the end of the process, at the mariner’s convenience, although most people will find getting fingerprinted and returning the old MMD at the end of the process is best to avoid work disruption and multiple visits to the REC. All mariners must present two pieces of photo identification when their fingerprints are taken. Acceptable ID includes old MMD, passport, driver’s license, credit card with photo, or similar. For out of state mariners, you may want to transfer your file to an REC closer to your home and/or have a closer REC do the fingerprinting and collection of the old MMD. The criminal record review may cause the process to take slightly longer, so do not wait until the last moment to renew the MMD. Also we must see at least a copy of two pieces of identification to start the criminal record review. We must see the original of the same two pieces of ID sent as a copy when the MMD is issued.

For endorsements/raise in grade of the MMD, a mariner may either make an appointment or mail their application to the REC. Normally mailing is the quickest way to be evaluated. If testing is required, the mariner will be permitted to test pending the results of the review, but the MMD will not be issued until the results of the review have been received, fingerprints taken, the applicant is positively identified, and the old MMD turned into the REC. All mariners must have two pieces of photo identification when their fingerprints are taken. The fingerprinting may be done either at the beginning or the end of the processing, at the mariner’s convenience, although most people will find getting fingerprinted and returning the old MMD at the end of the process is easiest. Also we must see at least a copy of two pieces of identification to start the criminal record review. We must see the original of the same two pieces of ID sent as a copy when the MMD is issued.

For a duplicate MMD, the mariner may either drop off their application, or they may mail it in. The MMD will be held for pick up unless other arrangements are made. A visit to the REC to have fingerprints taken and present two forms of identification is required. A signed statement explaining how, when, and where the MMD was lost or stolen and your efforts to recover it is also required as part of the application. Also we must see at least a copy of two pieces of identification to start the criminal record review. We must see the original of the same two pieces of ID sent as a copy when the MMD is issued. In the past, less than 100% of all applications received a criminal-record review. Now, all applications for MMDs are reviewed. It is critical that all DUIs, misdemeanor convictions, “no contest” pleas, pre-trial diversion programs, etc. be fully and completely disclosed with every application submitted. Stating “on file” is not adequate. A complete listing of any events previously disclosed as well as any new events is required with each application. Although not required, disclosure of any arrests that did NOT result in conviction is strongly encouraged. When the REC discovers arrests after the fact, this normally delays processing of an application at least eight weeks and may be up to 6 months while the mariner gets copies of court documents to show the arrest did not result in a conviction. The review will detect all contacts with law enforcement (arrests) and if not explained in the application, will delay processing of the application until all contacts are explained. Failure to disclose all convictions on each application may lead to criminal or administrative prosecution for a “fraudulent application”. Security concerns have become a major issue for both government and industry. We ask for your cooperation and understanding as we all deal with these new processes required to issue credentials to mariners. Questions or concerns should be directed to CDR Valley at extension 231 or Mr. Wells at extension 232, (504) 240-7300.

The Maritime Security Condition (MARSEC) within the New Orleans Captain of the Port zone is MARSEC 2. Waterfront facility and vessel owners and operators should immediately review and implement the interim MARSEC 2 measures in their security plans. These measures are intended to facilitate continued port operations with the appropriate degree of security, consistent with the Homeland Security Advisory System (HSAS) ORANGE Threat Level. If your plan does not address MARSEC 2 adequately, the Marine Safety Office can provide a list of suggested measures from the Vessel Security and Facility Security Navigation and Vessel Inspection Circulars (NVIC) 10-02 and 11-02, respectively. These NVICs are available at the following URLs:

Vessel Security NVIC 10-02: http://www.uscg.mil/hq/g-m/nvic/10-02.pdf
Facility Security NVIC 11-02: http://www.uscg.mil/hq/g-m/nvic/11-02.pdf

Local Coast Guard commands will continue to coordinate with government agencies and the maritime community to ensure that all stakeholders in the New Orleans Captain of the Port Zone are maintaining a heightened state of alert. Specific inquiries regarding the interim measures or reports of suspicious activities should be directed to Marine Safety Office New Orleans at (504) 589-6261.

Vessel operators and personnel should report any suspicious activity to the Coast Guard National Response Centers (NRC) toll free hotline. The NRC can be reached 24 hours a day at (800) 424-8802. The Coast Guard encourages mariners to report any suspicious activity to the NRC, particularly any activity that may threaten transportation systems or assets. Such as:

• Unknown persons photographing vessels or facilities.
• Unknown persons attempting to gain access to vessels or facilities.
• Suspicious individuals establishing businesses or roadside food stands either adjacent or in proximity to facilities.
• Unknown persons loitering in vicinity for extended periods of time.
• Unknown persons calling facilities to ascertain security, personnel, or standard operating procedures.
• Vehicles with personnel in them loitering and perhaps taking photographs or creating diagrams of vessels or facilities.
• Small boats with personnel on board loitering and perhaps taking photographs or creating diagrams of vessels or facilities.
• Suspicious general aviation aircraft operating in proximity to vessels or facilities.
• Any bomb threats to the vessel or company facilities.
• Unknown persons attempting to gain information about vessels or facilities by walking up to personnel or their families and engaging them in a conversation.
• Suspicious vendors attempting to sell merchandise.
• Theft of facility vehicles, vehicle passes, personnel identification, or personnel uniforms.
• Theft of standard operating procedures documents.
• Unknown or suspicious workmen trying to gain access to facilities to repair, replace, service, or install equipment.
• Suspicious emails on Internet, public affairs attempting to obtain information regarding the facility, personnel, or standard operating procedures.
• Suspicious package drop offs/attempted drop offs.
• Anti-American sentiment being expressed by employees or vendors.
• Anti-American pamphlets or flyers distributed to employees or placed on windshields in parking lots.
• Repeated or suspicious out-of-ordinary phone calls.
• Recreational boaters posing as mariners in distress to attract assistance from other vessels.

The Coast Guard announced in the December 30, 2002 Federal Register a series of nation-wide meetings to discuss maritime security issues. You may view or download the entire notice from the Department of Transportation’s (DOT) docket search web site at http://dms.dot.gov/search/searchFormSimple.cfm by entering the docket number 14069. The interim final rules should be published by early June and a final rule published in November. The mandatory compliance date should be one year from the date the final rule is published.

The Coast Guard issued four (4) Navigation Vessel Inspection Circulars (NVIC) on security which in addition to the new international codes and SOLAS addendums will form the basis of the guidance to our industry:

NVIC 4-02 Security for Passenger Vessels and Passenger Terminals
NVIC 9-02 Guidelines for Port Security Committees, and Port Security Plans Required for U.S. Ports
NVIC 10-02 Security Guidelines for Vessels
NVIC 11-02 Recommended Security Guidelines for Facilities

As part of its security initiatives the Congress passed and the President signed the Maritime Security Act of 2002. The bill in its entirety may be viewed at the following website http://thomas.loc.gov/ and entering the bill number S1214.

The law requiring the Coast Guard to develop and implement security regulations specifically waived the Administrative Procedures Act for these regulations. The Coast Guard is under legislative, political and public pressure to make our ports, waterways, facilities and vessels safe from terrorist attacks (criminal acts). The waiver of the APA means that the Coast Guard is not required to solicit, accept nor consider public comment in the development of these rules. The Coast Guard will implement these rules on their timetable, not ours. We must therefore lead, not follow, in the development of industry plans for port, facility and vessel security. The Coast Guard intends to publish proposed regulations in late spring and final regulations by November.

The proposal indicates that the Coast Guard intends to also apply the new international standards to vessels in domestic trades that are “at risk of being involved in a transportation security incident”.

The proposal indicates the Coast Guard will require vessels to conduct security analysis, have security plans, have security officers and implement security measures. This includes all vessels (including barges and MODUs) inspected under 46 CFR subchapters D, H, I, L, K and O, all towing vessels over 6 meters in length and small passenger vessels on an international voyage (this will probably include shuttle service to foreign vessels past 3 miles offshore, or any trip that requires Customs or Immigrations clearance)

The Coast Guard facility security regulations would apply to any facility that handles cargo regulated by 33 CFR parts 126, 127 or 154 (our docks), facilities that handle vessels that may carry over 150 passengers and facilities that receive vessels on an international voyage (this will probably include shuttle service to foreign vessels past 3 miles offshore, or even one port call that requires Customs or Immigrations clearance).

What can we do? The proposal allows for the development and approval of industry-wide plans. Our industry can form a task force to develop industry standard company, vessel and facility security plans. That task force should also include the development of standards for the company, vessel and facility security officer.

To date AWO (towing vessel security) and API (security of offshore facilities) have received Coast Guard approval of their generic plans. An OMSA committee is scheduled to begin work in May on the offshore support vessel generic plan. Additional volunteers to work on this project are needed. If you can help with this process, send an email to ken@offshoremarine.org.

The Eighth Coast Guard District’s much anticipated policy on the use of dynamic positioning systems by OSV’s during the transfer of oil or hazardous materials was published January 22, 2003. While there are no major changes from the drafts that were circulated for final review, you can obtain a copy of the final policy by sending an email to ken@offshoremarine.org. This policy was the result of many hours of dedicated work by a special OMSA member task force, the Offshore Operators Committee and the staff of the Eighth Coast Guard District. All of the participants are to be greatly commended.

OPA90 violations can result in criminal prosecution of both corporations and individuals, even in the case of relatively small spills. On January 3, 2003, Dolbey Marine Inc., of Salisbury, MS, was sentenced in the Federal District Court of Baltimore to a felony charge of failure to notify the U.S. Coast Guard of an oil spill. The sentence included a fine of $7500 and 3 years probation. Mr. Charles Dolbey Jr., owner of Dolbey Marine Inc., was also sentenced to 6 months home detention with work release and fined $3000 for a misdemeanor charge of negligent discharge of oil into U.S. waters.

An estimated 50-100 gallons of a diesel fuel and waste oil mixture was spilled on the Wicomico River in Salisbury. An investigation determined the spilled material had come from the Tug GABRIELLE that was owned and operated by Dolbey Marine Inc.
Source: February 2003 Vessel and Facility Compliance News

Environmental Protection Agency (EPA) Administrator Christine Todd Whitman last Friday signed off on regulations adopting emission standards for new marine diesel engines that will be installed on U.S. –flag vessels after January 1, 2004. These standards apply to marine diesel engines with per-cylinder displacement at or above 30 liters or more, also known as Category 3 marine diesel engines. The Tier 1 standards will apply to older engines only if they are covered from land-based to marine engines or if they are installed on a new vessel. EPA has indicated that the near-term standards are achievable with less than one year of lead-time because manufacturers are already certifying their engines to the equivalent international standards under the agency’s program for Voluntary Statements of Compliance. EPA expects the regulation to be published in the Federal Register by the end of February. The Tier 1 standards are equivalent to the internationally negotiated emissions limits for oxides of nitrogen, MARPOL Annex VI. EPA has affirmed the Administration’s intent to seek U.S. Senate ratification of Annex VI and to work within the International Maritime Organization to strengthen Annex VI standards. The agency has also served notice that it is committed to another rulemaking in a few years to consider a second tier of more stringent U.S. standards.
Source: Maritime Update February 7, 2003

The purpose of this letter is to raise awareness in ensuring vessels operating in South Louisiana, especially at the docks and moorings in Port Fourchon, comply with the lighting requirements set forth in the Rule 20 of the Inland Navigational Rules. Many vessel operators are displaying their “running lights” while moored to these docks, showing their vessel to be under way when, in fact, they are not. Incorrect use of the running lights poses a hazard to navigation for other vessels transiting the area. To reduce the incidence of these navigational rule violations, the U.S. Coast Guard will be working with other local law enforcement agencies to identify and take civil penalty action against non-compliant operators. A $5,000 civil penalty can be assessed against both the company and the master for non-compliance with the rules concerning lights. Further, the master may also be subject to Suspension and Revocation action against his or her license.

Please direct any questions you may have regarding this issue to Lieutenant Ed Kesler of Coast Guard Marine Safety Unit Houma at (985) 851-1692.
S.P. Garrity Captain of the Port