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Towing Vessel Operators Must Choose Wisely - Part 4

Subchapter M makes a distinction between surveys and audits. A very simple explanation I like to use is: a survey is an inspection of the vessel, while an audit is an inspection of the people. Under the TSMS option, third party auditors will verify compliance with the TSMS on behalf of the government. Third party auditors will be managed by a third party organization. It remains to be seen how this process will work.  Will vessel operators be able to use the auditor of their choice, or will an auditor be assigned by the third party organization, with no input from the company? Will third party auditors be paid directly by the towing company, creating a potential conflict of interest, or will auditor fees be passed through the third party organization?  These are critical issues which may be resolved in the final rule or through guidance documents.

 


The Coast Guard will provide the check and balance for this program to ensure that the audits have been conducted thoroughly and accurately. There may be consequences for an auditor who is found to have conducted a less than adequate audit resulting in a Towing Safety Management Certificate being issued to a non-compliant vessel. For example, consider the recent case of Mr. Alejandro Gonzalez. According to a Department of Justice press release, Mr. Gonzalez, a Miami-based surveyor working on behalf of the flag of Bolivia, certified the M/V Cosette safe for sea. Shortly thereafter, when the vessel arrived in New York, Coast Guard inspectors found "fuel and exhaust pouring into the engine room." Since Mr. Gonzalez had certified the vessel safe for sea and the Coast Guard determined it was not, he was convicted by a federal jury on May 24 for "making a false statement."  Mr. Gonzalez had other charges, but for this conviction he faces a maximum of five years in prison. He will be sentenced on August 2. Subchapter M auditors and surveyors could face the same fate as Mr. Gonzalez if the Coast Guard determines that "false statements" have been made. While this is a remote possibility, the take-away should be that, presumably auditors will be aware of their own exposure and therefore owners and operators should prepare for more stringent audits under Subchapter M.


Besides the auditor's exposure, attorneys Marc Hebert and Barrett Rice, in their paper, "Subchapter M from a Defense Lawyer's Perspective," weighed in on the importance of choosing an auditor with regards to owners' legal liabilities. "… For those vessel owners opting for the TSMS option, consider all theses legal implications when choosing your auditor or surveyor. What if the third party auditor fails to identify a portion of the TSMS plan which is not effectively being implemented? What if the surveyor misses an unsafe condition on the vessel, the knowledge of which will ultimately be attributed to you? While many vessel owners will seek out the auditor or surveyor who helped them obtain their certificate of insurance or certificate of compliance as quickly as possible, we urge you to find that third party auditor and/or surveyor who will scrutinize any aspect of your business and present you with the brutal truth." I couldn't agree more. 

Conclusion - Towing Vessel Operators Must Choose W...
Towing Vessel Operators Must Choose Wisely - Part ...
 

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Monday, 10 February 2025

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