ISM Code & Auditing Techniques

EMSA Training – Module 3 & 4

DNV GL © SAFER, SMARTER, GREENER

Navigator

Module 1 – Evolution of Management Systems

and the ISM Code
Module 2 – ISM Code Requirements (incl. latest developments)
Module 3 – Stakeholders in Shipboard Operations
Module 4 – Knowledge of Shipboard Operations
Module 5 – The ISM Code and the EC Regulations & IMO
Module 6 – Types and Scopes of Flag State Audits and Issuance of
Certificates
Module 7 – The Auditor
Module 8 – Audit Planning and Organization
Module 9 – Audit Conduction
Module 10 – Audit Reporting & Follow-up
Module 11 – Role Play

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Flag States - Tasks

• Development of national law on shipping

• Implementation of international Conventions into its own

national law

• Ensure compliance of ships flying its flag with its own

national law
 often delegated to Recognized Organisations
(RO) = Classification Societies

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 Module 3 / Activity 1

Flag State Tasks

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Port State Administrations - Tasks

• Port State controls (PSCs) of foreign ships within its ports for
compliance with international standards

• Alliance in regional associations

– e.g. Paris MOU for Europe, Tokyo MOU for Pacific Area

• PSC legalized by all important IMO

conventions

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EMSA - ISM Code & Auditing Techniques

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DNV-GL Tools: Top Ten PSC Findings & Maintenance Checklists

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Classification Societies

What are the tasks of a

classification society?

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Classification Societies - Tasks

 Development of class rules, i.e. standards for ships’

design, construction and operational maintenance
 Research programs in ship technology
 Survey and Classification of ships
 Publication of a register book
 Statutory surveys and certification as delegated by Administrations

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Dual Tasks: Class - Statutory

Classification Statutory

Rules for Classification and IMO: Conventions, Codes,

Construction Resolutions

Recognized technical standards National Law, additional national

requirements

Administration is responsible and

may authorize Classification Soc.

Internal External

Application and Interpretation Application by DNV GL

by DNV GL on behalf of Administration,
Interpretation by Administration
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Delegation of Authority

 Authorization of Recognized Organizations (RO)

– Minimum standards (Res.MSC.349(92), dictating: resolution A.739(18) entitled
Guidelines for the authorization of organizations acting on behalf of the Administration, as amended
by resolution MSC.208(81), and resolution A.789(19) entitled Specifications on the survey and
certification functions of ROs

– Formal written agreement

– Instructions if a ship has been found unfit to proceed
– Provision of RO with national law and interpretations
– RO to assist in the interpretation of regulations
– Surveys, audits and issue of certificates
– Program for monitoring and communication

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DNV GL Tool: Authorization List

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IACS - Tasks

 Standards among Classification

Societies

 Publications (www.iacs.org.uk)
– unified requirements
– interpretations
– recommendations
– common structural rules

 Representation at IMO

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IACS Recommendation 74 –
A Guide to Managing Maintenance

 The “Guide to Managing Maintenance“ laid down

in the IACS Rec. 74 (Rev.2 Aug 2018)

• Most failures in shipboard safety management

systems leading to a PSC detention refer to
maintenance

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Industrial Organizations

 ISO International Standard Organization

 ICS International Chamber of Shipping

 BIMCO The Baltic and International Maritime Council

 OCIMF Oil Companies International Marine

Forum

 INTERTANKO Int. Association of Independent Tanker

Owners

 INTERCARGO Int. Association of Dry Cargo

Ship-owners

 Creating Industry Standards

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Closing – Module 3

Do you have any further questions?

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Navigator

Module 1 – Evolution of Management Systems

and the ISM Code
Module 2 – ISM Code Requirements (incl. latest developments)
Module 3 – Stakeholders in Shipboard Operations
Module 4 – Knowledge of Shipboard Operations
Module 5 – The ISM Code and the EC Regulations & IMO
Module 6 – Types and Scopes of Flag State Audits and Issuance of
Certificates
Module 7 – The Auditor
Module 8 – Audit Planning and Organization
Module 9 – Audit Conduction
Module 10 – Audit Reporting & Follow-up
Module 11 – Role Play

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 Commercial
Stakeholders in shipboard operations
Operational
Example:
ISM relevant
Insurance

Others:
• Flag St
Mgmt contract Ship • Port St
Ship
Broker Management • Class
Owner Company

Cargo Vessels:
Charterer Crewing Crewing
Agent
Passenger Vessels:
Manager Agent
Tour Operator
(Charterer)

Ship
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- Master -

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 Commercial
Potential ISM conflicts
Operational

ISM relevant
Insurance

Others:
Mgmt contract Ship
Ship • Flag St
Broker Management • Port St
Owner Ressources Company • Class

Cargo Vessels:
Charterer Crewing Crewing
Agent
Passenger Vessels:
Manager Agent
Tour Operator Direct
(Charterer) influ-
MLC 2006
ence

Operational
orders
Ship
affecting
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Code & Auditing Techniques
- Master -

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Conflicting goals in shipping

Officers and crew see several different goals and objectives, and some of these
goals might at times be in conflict with one another…
Revenue Goals SMS Goals Budget Goals Time Goals

“If we stop for “To be in “The budget on “We are told to

maintenance, we compliance with spare parts is be in Rotterdam
will be delayed and the rest hour spent, and it’s in 12 hours. Full
lose a good deal” regulation” only September” speed ahead”

Could there possibly be conflicting goals on safety in some

circumstances that might result in safety not being the top priority?
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 Operational function

The Master Commercial function

• Represents Owners / Charterers

• Protects Owners / Charterers interests against
third parties
• Is fully responsible for all shipboard operations
(Cargo / Passenger related)
• SMS responsibility acc. to ISM Elem. 5

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Seaworthiness and Cargo-Worthiness

Seaworthiness

Cargo-worthiness

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 Operational function

The Ship-owner Commercial function

• Owns merchant (commercial) ships

• Operates these for delivery of
cargo
• At a certain freight rate
• Liner – Tramp services
• Is organized through Company
• Bareboat charter / Sub-charter /
Beneficial owner
• Contracts ship management
companies for nautical and
technical management

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 Operational function

Ship Management Company (1) Commercial function

Technical Management
• Co-ordination of all technical aspects related to ship operations by
Company’s technical inspectors (superintendents – mostly ex ship
engineers)
• Regular inspections on board / continuous technical support
• Technical procurement
• Organization of planned maintenance
• Providing technical support for repair works, incl. docking for major repairs
• Organize shipyard guarantee works /
periodical dry dockings
• Budget control for all technical expenditures
• Hiring in external services (if applicable)

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 Operational function

Ship Management Company (2) Commercial function

Nautical Management
• Co-ordination of all nautical , safety and pollution prevention
aspects related to ship operations by Company’s nautical inspectors
• Development and supervision of ship management systems
• Occupational health and safety
• Regular inspections on board / continuous support of ship’s command
• Supervision of planned safety maintenance and shipboard training
• Ship’s administration (Registration, flag- and port State affairs)
• Ship’s documentation (Ship’s papers, sea charts, etc.)
• ISPS matters
Crew Management
• Supervision crew’s certification and qualification according to
STCW, MLC and flag State requirements

Despite the above stated managements, the only management with a regulatory status
is the Company in the ISM Code, i.e.: the Company appearing in the DOC / SMC, who is
responsible for ensuring that all these activities are carried out in accordance with the
requirements in the ISM Code – and the ISM Company is responsible for both
technical management, crew management and nautical management – even if the tasks
are delegated to other entities.
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 Operational function

The Charterer Commercial function

• Owns cargo, or
• Operates passenger
transport services, or
• Acts as Tour operator
• May employ shipbroker
• May also be a party
without a cargo

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Charter Types and Contracts

Voyage • Hiring of vessel and crew

• Payment on a per-ton or lump sum basis
Charter • Owner pays fuel / crew

Time • Hiring of vessel for specific period

• Owner manages the vessel
Charter • Charterer pays fuel, port dues, “daily hire”

Bareboat • Hiring of complete vessel (“bare boat”)

• Charterer pays all operating expenses
Charter • Title of ownership

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 Operational function

The Ship Broker Commercial function

• Specialist intermediaries between ship-owners and

the charterers
• Specialized for dry cargo chartering / tanker
chartering / container / sales & purchase broker
(S&P) / salvage chartering / new building
• Continuously monitoring the shipping market (spot
market, charter market. etc.)
• Acting as negotiator – charterer/ owner regarding
terms & conditions & payment, co-ordinating
communication
• Paid on a commission basis

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 Operational function

The Crew Manager / Crewing Agent Commercial function

•Provides qualified crew

•Is contracted by ship managers
Crew •Mostly employer of crew

Manager •Entire or part of the crew

•Arranginging signing on/off
•May organize shorebased training

Crewing •Selects and interviews crew

•Contracted by crew manager,
Agent ship owner / manager

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 Operational function

Commercial function
The Agent

• Charterer’s / Owner’s local representative

• Intermediate between charterer / owner/
ship and third parties
• Main tasks:
• Immigration, customs, etc.
• Navigational aids – pilot, tug
• Financial arrangements Types of agents:
• Port services • Ship’s clearing
• Contact person for berth arrangements, agent –
husbandry
terminal operations & schedule • Forwarding /
• Miscellaneous (crew change, order taxi, Customs clearing
purchase, etc.) agents
• Cargo agents

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 Operational function

The Underwriter / Insurance Commercial function

• Marine Insurance cover loss or

• Specialized underwriters: Hull & Machinery
(H&M), cargo, Loss of hire (LoH)
• Protection & Indemnity clubs (P&I) cover all
risks not covered by insurance
• Determine the extent of damage to cargo, ship
and other liabilities
• Specialized in claims assessment
• Give an estimate of damage in writing as a
legal document for insurers

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Closing – Module 4

Do you have any further questions?

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