Summary

• Background
• Findings of our audit
• References to the Maritime Safety Authority and Maritime New Zealand
• Recommendations

Background

In 1997, we reported to Parliament that the Maritime Safety Authority of New Zealand (the MSA) was introducing Safe Ship Management for New Zealand-owned commercial vessels operating in New Zealand, such as small domestic cargo, passenger and fishing vessels, to improve their day-to-day safety.

Safe Ship Management replaced the earlier system of annual surveys, and aimed to make ship owners and operators responsible for the daily safe maintenance and operation of their vessels throughout the year.

Safe Ship Management was introduced in February 1998. It was followed a year later by Safe Operational Plans – a scaled-down version of Safe Ship Management, designed to provide a practical and affordable set of safety requirements for smaller commercial operators, such as commercial jet boat and river rafting operators.

The new system of Safe Ship Management required inspections and audits to supplement the daily obligation on owners and operators to maintain and operate their vessels safely. The audits and inspections were carried out by approved service providers (SSM companies). In the case of the Safe Operational Plans system, Authorised Persons carried out inspections and audits.

Problems with Safe Ship Management

The introduction of Safe Ship Management and Safe Operational Plans was not without problems. A report commissioned in 2000 by the MSA Board (and conducted by Pacific Marine Management Limited) expressed concern at evidence of growing risks associated with the new systems. The report identified problems including a lack of consistency, overcharging, and reluctance by some owners and operators to undergo audit.

In March 2002, the MSA Board initiated another independent review of Safe Ship Management and Safe Operational Plans, conducted by Thompson Clarke Shipping Pty Limited (Thompson Clarke) – an Australian company with internationally recognised expertise in the maritime field. The Board received Thompson Clarke’s comprehensive Review of Safe Ship Management Systems (the SSM Review) in September 2002.

On 17 December 2002, the MSA Board approved the implementation of 11 of the SSM Review’s 29 recommendations, and noted the remaining 18.

The changes resulting from the 11 recommendations represent a major shift from the initial Safe Ship Management system of self-regulation and the delegated monitoring and enforcement of safety standards towards direct MSA regulation of, and involvement in, the administration and monitoring of the system.

Because of our previous interest in Safe Ship Management, we decided to:

• examine whether the MSA Board had adequate information to make well-informed decisions on which SSM Review recommendations to implement;
• examine the time frames involved in implementing the recommendations and whether the MSA Board was monitoring the implementation of the approved recommendations;
• examine whether the MSA Board properly considered the costs to the maritime industry of implementing the proposed changes;
• examine the effectiveness of consultation with key stakeholders; and
• examine progress in implementing the approved recommendations.

Findings of our audit

Our findings cover the MSA’s approach to the recommendations of the SSM Review and its progress in implementing changes to the Safe Ship Management and Safe Operational Plans systems.

The MSA’s approach to the SSM Review recommendations

In our view, the MSA adopted an appropriate approach to receiving and implementing the recommendations from the SSM Review.

We are also satisfied with the MSA Board’s reasons for not implementing all the SSM Review’s recommendations.

It is our view that, the MSA did not estimate the costs to the industry of the MSA implementing the SSM Review’s recommendations for auditing and, from the perspective of relationship management, it may have been useful to estimate these costs, and to inform owners and operators of them. Management of the MSA and the MSA Board consider that this work was conducted when SSM was introduced.

We also consider that the MSA did not provide written specific or summarised feedback to stakeholders who provided submissions when they were invited to do so. It is good practice to provide such feedback.

Progress in implementing SSM Review recommendations

The most significant change resulting from the SSM Review is the introduction of the New Zealand Code of Practice for Safe Ship Management (the new Code of Practice). The Code of Practice is the main way the MSA has implemented the SSM Review’s recommendations. It requires vessel owners, operators, and SSM companies to keep extensive safety management documentation, and – on request – to either display it or make it available to the MSA. The Code of Practice also has inbuilt performance indicators for SSM companies.

Our view is that introduction of the new SSM Code will significantly improve the Safe Ship Management system by providing a consistent and mandatory basis for defining and monitoring the implementation of safety in the maritime industry. However, the MSA must ensure that it undertakes appropriate monitoring, and, if necessary, enforcement action to ensure that the SSM Code is complied with.

The Safe Operational Plans Authorised Persons scheme has been largely abolished, and replaced by use of the MSA’s own safety auditors. This change will ensure that there is greater consistency in the provision of audit services to Safe Operational Plans vessel operators.

There are 2 exceptions to the revised Authorised Persons scheme. In the first, the MSA allows New Zealand Underwater (which represents individuals and recreational groups concerned with the maintenance, preservation, and protection of the underwater resource) to manage the Authorised Persons scheme for dive boats 6-metres and under. Secondly, the MSA allows the Queenstown Lakes District Council to audit adventure tourism vessels (jet boats and white water rafts) in its district. In our view, these exceptions could result in different audit and safety standards in the Queenstown Lakes District Council or for dive boats 6-metres and under. The MSA must ensure that they have appropriate monitoring procedures to ensure that this does not happen.

The MSA has also reclaimed from the SSM companies the initial audit of all Safe Ship Management vessels. The initial audit is an important part of the establishment of the Safe Ship Management baseline standard for vessels, and therefore helps create consistency. This action by the MSA is also intended to help address another SSM Review finding that the MSA was losing hands-on expertise and experience in one of its key areas of responsibility. We endorse the MSA doing the initial audit.

The SSM Review also looked at the MSA’s safety profiling system and suggested that the MSA needed to give proper attention to the safety profiling system in order to ensure that the potential benefits can be fully realised. Although we did not audit the MSA’s safety profiling system, we endorse the use of such systems, so long as they are reliable indicators of risk.

References to the Maritime Safety Authority and Maritime New Zealand

Our report refers to the Maritime Safety Authority in relation to our findings because this was the name of the organisation at the time of the audit. However, our recommendations are directed at Maritime New Zealand, being the new name of the entity from 1 July 2005.

Recommendations

We have made 2 recommendations: