Part 6: Progress in implementing changes

6.1
In this Part of the report we explain the intended changes from the 11 approved SSM Review recommendations, and discuss the progress achieved by the MSA in implementing them.

6.2
We have grouped the changes into 3 main areas:

• the Code of Practice;
• the MSA reclaiming of most of the Safe Operational Plans services; and
• other changes, relating to risk management processes and to improving communications with stakeholders.

New mandatory Safe Ship Management Code of Practice

6.3
The SSM Review found that SSM companies and Authorised Persons were not applying consistent standards when assessing and auditing owners and operators.

6.4
Under the system as it was in 2002, each SSM company was, to a considerable extent, free to interpret the rules in its own way and to develop its own SSM standards, which differed from company to company. This led to inconsistency in the way SSM companies surveyed, inspected and audited owners and operators.

6.5
The SSM Review also found that the MSA exercised inadequate management control over SSM companies, which perpetuated inconsistent SSM company practices.

6.6
Thirdly, under that previous system, SSM companies undertook the initial audit of owners and operators. The SSM Review noted that this led to inconsistency of service delivery, and also that the MSA, through exclusion from the process, ran the risks of reducing its relevance to the maritime industry and eroding its store of technical expertise.

Our findings

6.7
The MSA has developed a Code of Practice that came into force on 1 February 2005.

6.8
The Code of Practice is a national standard covering competencies, performance measures and procedures for SSM companies, vessel owners and operators and the MSA. The Code of Practice is mandatory, in that participants will no longer be free to develop their own practices and standards.

6.9
The main aims of the Code of Practice are to ensure that the MSA has the appropriate management control and oversight of the industry, and that there are national standards of performance and behaviour that participants must adhere to if they are to remain in the system.

6.10
Greater management control by the MSA has been advanced through the Code of Practice, because of its mandatory obligations, standards, and procedures, including its documentation requirements. In particular, approval by the Director of Maritime Safety of an SSM company depends on its ability to comply with the Code.

6.11
Secondly, the Code of Practice now sets out a series of performance indicators that SSM companies must report on to the MSA. These indicators allow the MSA to assess how well a company is performing and include:

• time taken to approve safety management manuals for ships;
• number of vessels in an SSM company’s system without a current Safe Ship Management Certificate (see paragraph 2.19);
• number of vessels in an SSM company’s system with a current Safe Ship Management Certificate but where the MSA database has not been updated; and
• number of vessels in an SSM company’s system where the Director is not satisfied that a successful subsequent audit conducted by a Maritime Safety Inspector has been completed.

6.12
Thirdly, under the Code of Practice, the MSA now undertakes the initial Safe Ship Management audit of ship owners and operators. This has 2 advantages – it allows the MSA to maintain its technical expertise, and it allows the MSA to set the “benchmark” under which future audits can be conducted, thereby ensuring consistency.

6.13
In our view, the Code of Practice has the potential to fix many of the problems identified in the SSM Review. In particular, it has the potential to:

• improve the overall strategic management of Safe Ship Management by the MSA;
• improve the MSA’s management control over SSM companies; and
• improve performance and service delivery standards of SSM companies.

6.14
However, introduction of the Code of Practice will not by itself achieve these goals. In order for the full benefit of the Code to be realised, the MSA must:

• ensure that the Code of Practice is accepted by the maritime industry;
• actively oversee the provisions of the Code of Practice; and
• keep the Code of Practice up to date.

The Maritime Safety Authority reclaims most of the Safe Operational Plans services

6.15
Prior to the SSM Review, Safe Operational Plans service providers were called Authorised Persons. The Authorised Persons’ role was to liaise with owners and vessel operators, and to inspect, audit, and approve vessels and operations on behalf of the Director of Maritime Safety.

6.16
The SSM Review found that were too many Authorised Persons for too few Safe Operational Plans operations. It also identified faults in the selection, training, auditing and support provided for Authorised Persons. These faults resulted in significant omissions in areas of audit competency and procedure, and non-fulfilment of the legal requirements of some maritime rules.

6.17
In particular, the Review noted the following faults in the services delivered by Authorised Persons:

• failure to check operators’ SOP reviews;⁷
• failure to verify owners’ compliance with the applicable Maritime Rule or Safe Operational Plan;
• failure to verify whether a complete and accurate record had been maintained of accidents and incidents, and whether the MSA had been notified of them;
• failure to check during the initial audit whether the Safe Operational Plans complied with the applicable Maritime Rule;
• exempting operators from certain requirements of the applicable Maritime Rule, without due MSA approval;
• not understanding the audit requirements of the applicable Maritime Rule; and
• not providing owners and operators with a written record of the required corrective actions, although this is required by the applicable Maritime Rule.

6.18
In summary, the use of Authorised Persons was clearly not always working as effectively as it should, and was found by the reviewers to need fundamental improvement.

Our findings

6.19
The MSA has now dispensed with the services of about 50 private Authorised Persons, and has introduced a new national Safe Operational Plans audit scheme using its own 2 safety auditors who can be more effectively trained and supervised in the implementation of national standards. These auditors have assumed responsibility for auditing jet boats and white water rafts.

6.20
There are 2 exceptions to the new Safe Operational Plans audit scheme – one is for dive boats under 6-metres and the other is the Queenstown Lakes District Council.

6.21
For dive boats under 6-metres, New Zealand Underwater will recommend to the MSA who the Authorised Persons should be. Moreover, New Zealand Underwater – and not the MSA – will audit the Authorised Persons every year. We are told that the reasons for this approach is that New Zealand Underwater has an excellent understanding of this particular sector of the maritime industry, and is well placed to identify those persons suitable to act as Authorised Persons. Further, the MSA will ensure that New Zealand Underwater undertakes apns by entering into a memorandum of undertaking with New Zealand Underwater.⁸

6.22
With regard to the other exception, for the Queenstown Lakes District Council, the existing rule recognises that Authorised Persons working in the Queenstown Lakes District “must be engaged, employed or contracted by the Queenstown Lakes District Council for that purpose”.

6.23
Because of the existing rule, and the fact that the Queenstown Lakes district contained a large and important proportion of the adventure tourism industry in New Zealand, the MSA accepted the Council’s continuing right to approve appointment of an Authorised Person in its district. The MSA nevertheless intends to oversee the Authorised Person appointment, and to audit the quality of the safety management work for commercial jet boats and white water rafts. The Queenstown Lakes District Council Authorised Person will not be able to issue Safe Operational Plans Certificates of Compliance. This will be done by the MSA on receipt of acceptable audit and inspection reports.

6.24
In our view, these changes to the Authorised Persons scheme, whereby 50 private Authorised Persons have been replaced by 2 MSA Safety Auditors, will significantly improve the delivery of effective and consistent Safe Operational Plans services to adventure tourism.

6.25
However, we note that, just as the MSA is promoting the acceptance of more consistent and universal safety standards among its stakeholders, it has granted exemptions to both the Queenstown Lakes District Council and for dive boats under 6-metres.

6.26
Both these exceptions mean there are risks of different standards of service provision. Accordingly, the MSA must ensure that such risks are managed. In respect of dive boats under 6-metres, the MSA must finalise the memorandum of understanding with New Zealand Underwater and, once it is finalised, ensure that New Zealand Underwater adopts and follows the memorandum. In respect of Queenstown Lakes District Council, the MSA must undertake the appropriate audit and quality inspections of Authorised Persons employed by the Council. Moreover, we believe that the MSA should keep these exemptions under review to ensure that the exemptions are not adversely affecting the Safe Operational Plans system.

Other key changes

6.27
Other changes relate to safety profiling and improving communication with stakeholders.

Safety profiling

6.28
The SSM Reviewers were not specifically requested to look at the MSA’s safety profiling system (Safety Profile Assessment Number or SPAN), but did make some comments on the system.

6.29
Broadly, the aim of the SPAN system is to improve the overall safety performance of the maritime industry by allowing the MSA and SSM companies to permit better selective targeting of high-risk vessels. The SSM Review was generally supportive of selective targeting, but had a number of reservations with the SPAN system – in particular that:

• too much weight was given to third party views of a particular vessel, and not enough weight to the vessel owner’s self-assessment;
• it would be difficult to reconcile the potentially different views of these third parties;
• there may be issues concerning who will pay for the increased audit of “poor operators”; and
• there would be issues (e.g. privacy) around the use made and circulation given to the safety profile of any particular operator or vessel.

6.30
The MSA uses the SPAN system to assess the risk profile of each vessel. A high rating may result in more audits of the vessel. The MSA also encourages operators to use the system to determine their own safety performance, and to determine which aspect of their operation needs to be reviewed so their rating can be improved.

6.31
Two of our recent reports, Civil Aviation Authority: Certification and surveillance functions (June 2005) and Effectiveness of controls over the taxi industry (June 2005), endorse the use of risk profiling techniques in the New Zealand transport industry. However those reports show that, to be effective, risk profiling needs to be:

• accurate, in that the assessment given as a result of the risk profiling reflects actual risk;
• meaningful, in that some action (or non-action) is taken as a result of the risk profiling (e.g. more or less audit activity); and
• flexible, in that the risk profiling system must be able to deal with development in the particular sector.

6.32
The MSA needs to ensure that the SPAN risk profiling system has these attributes, so that all the potential benefits of the system can be realised.

Informal communication

6.33
Prior to the SSM Review, there were some successes in introducing Safe Ship Management to small-vessel owners and operators. These successes occurred when SSM companies used a range of informal communication and discussion forums to encourage the sharing of information and perspectives on maritime safety, with a view to engendering safety awareness. The review said that such low-key and informal means of communication, if further developed and refined, would also deliver tangible benefits for a much greater proportion of small stakeholders.

6.34
The SSM Review suggested a number of ways of encouraging more operators to commit to the Safe Ship Management system, and observed that an existing industry advisory group – the Fishing Industry Safety and Health Advisory Group (called FISHGroup) – had made a significant contribution in this regard. If other similar groups were established to consider maritime safety, health, and operational issues affecting the maritime industry, this might significantly improve communication between stakeholders and the MSA in relation to safety issues.

Our findings

6.35
The MSA is working with the SSM companies to ensure that the risk management database, SPAN, is accurate, up-to-date and correctly calculated. The Code of Practice reinforces risk management by the MSA and SSM companies by specifying more frequent and earlier audits and inspections of vessels that are high risk as determined by SPAN or in the estimation of an SSM company.

6.36
The matter of more informal processes to encourage uptake of Safe Ship Management was addressed by more general liaison and advisory contacts between the owners and operators of small vessels and maritime safety inspectors and safety auditors. Among other things, the Code of Practice specifically aims at using these informal methods (such as consultative and advisory groups and industry partnerships) to improve safety awareness in the maritime industry, and to continually advance the implementation of Safe Ship Management.

6.37
For example, 3 industry advisory groups have been convened by the MSA to provide advice and assistance on the development of relevant policy. They are FishSAFE (the Target F1 Advisory Panel which is composed of 2 groups representing commercial jet boating and rafting industry representatives respectively) and the Target B Advisory Group (representing the SSM passenger/non-passenger sector).

6.38
In addition, another industry advisory group was established to provide advice and assistance to the MSA on how to improve communication with that target group. The establishment of this advisory group followed the unsatisfactory attendance in 2004 of owners and operators at a nationwide series of seminars aimed at informing and exchanging views about the pending changes.

7: "SOP review" means a mandatory review of the Safe Operational Plans by the owner on a regular basis and following any accident. A written record must be made of each such review, which must include a summary of any conclusions drawn, and any actions taken, as a result of the review. Maritime Rule Part 80.6, Appendix 1 (8.4c), and Part 80.9 Appendix 2 (4.2 (vi) (ff).

8: We note also that the SSM Review said that, for dive boats under 6-metres, there would appear to be no justification for imposing the SOP system on them as they were such a low risk. A voluntary Code of Safe Working Practice might be more appropriate in all the circumstances.