Tuesday 24 April 2012

CMAC DVRO Presentation - Armin Grigatis


Small Commercial Vessel Association
Ontario Region
CMAC Presentation/Domestic Vessel Regulatory Oversight Committee
April 25, 2012
Honorable “CMAC” Members:

Background
We are a newly formed group of Small Commercial Vessel Operators who would like to take this opportunity to express a number of concerns on Federal regulations affecting our industry. Our group is mostly comprised of Marine Contractors, Marina & Taxi Boat operators, Tour operators, Property Managers, Camp operators & Construction Support service providers.
Many of us have been working on inland lakes across northern Ontario, including Georgian Bay, the Muskoka Lakes and Parry Sound District for decades and in some cases generations. Many of us possess considerable nautical skill & experience.
Construction is a challenging and sometimes dangerous profession that requires significant training and experience to safely execute work on Road Accessible projects.
When Construction and the provision of related services occurs in water access locations using small work boats , landing and deck barges to deliver personnel and materials to offshore locations, it adds exponentially to the complexity  and risk related to performing  work safely . 

Relevance of current SVCP regulations to the Small Commercial Vessel Industry
We have observed that most of the TC regulations based on the Canada Shipping Act 2001 as amended in 2007  ,appear to be aimed at larger ocean going and great lakes cargo & charter vessels. Undoubtedly the new small vessel inspection protocols and Blue Decal program were developed by TC staff who are extremely well versed on vessels over 15 gross tons .They are perfectly appropriate for larger vessels that have engine rooms well away from the helm of the vessel ,and operated by multiple experienced crew . They are not necessarily appropriate for small 6 & 8 meter vessels where the operator can reach over the side of the boat to grab the dock or pier when landing. These smaller vessels are certainly more maneuverable and easily controlled by a single operator in most cases. The advertising on the TC website indicates that the “Blue Decal” SVCP self inspection program is discretionary and vessel owners may comply with the program on a voluntary basis. The problem is that since the Canada Shipping Act 2001 was brought into law in 2007, the old regulations are no longer in force. Therefore the only point of law and reference for courts & insurance companies in case of a claim, are the new SVCP regulations. TC seems to be “suggesting” we comply with the new regulation, but they are not insisting on it? To operate outside these regulations would be extremely foolish.

How does SVCP affect our insurance?
 “The SCVA is concerned about how insurance companies are or will react to operators whose vessels do not comply with Transport Canada’s Small Vessel Compliance Program (SVCP).
Currently, insurance companies, that I contacted, are not requiring vessels be in compliance with the SVCP however they indicated that if these requirements were being strictly enforced, they may make compliance part of their underwriting criteria.
When asked about self inspections of vessels the insurance companies were reluctant to comment as they were not familiar with the criteria. By comparison; to qualify for automobile insurance, automobiles must have safety inspections completed. These must be completed by an authorized repair facility – there is no self inspection. Should the insurance companies make compliance with the SVCP mandatory, it is hard to say whether self inspections will be acceptable.
Some insurance companies require surveys be completed by a qualified marine surveyor on vessels that are over 10 years old. They also may require periodically updated surveys as the vessels age. Other insurance companies accept that the owner is being prudent about maintaining their vessels and only ask for details of their maintenance program. This could be the same with the SVCP.
In reviewing the insurance policy wordings, I did not find an exclusion specifically relating to compliance under the SVCP. This being said, should a major loss occur and it was deemed that the loss would not have occurred had the vessel been in full compliance of the SCVP, an insurance company may try to deny or limit the loss due to the non-compliance. Similarly, a claim on a vessel with outstanding marine survey recommendations that have not been completed may also be denied or limited.
In summary, the insurance companies have not made compliance with SVCP part of their underwriting criteria however experience tells me that, as they become more familiar with these regulations, they may very well be asking for confirmation of compliance before insuring small commercial vessels.”
Prepared by:
Tim Pawlowski, CCIB
Lackner McLennan Insurance Ltd.
423 King Street North, Waterloo, ON N2J 2Z5



It is our concern that in situations where marine related accidents occur , our members ‘ insurance providers will have a field day with “legal loopholes “ because many operators will not be able to demonstrate that their vessels were in compliance with the current regulations .


SCVA concerns about our members’ ability to comply with SVCP
We believe Transport Canada’s mandate and obligation is to protect “all” vessels used by the public. The proposed changes to small commercial vessels as stipulated in the SVCP guide appear to be an appropriate guideline while designing & building all vessels regardless of commercial or pleasure craft designation. Many of the measures proposed would add significant expense and complexity to the design & construction of the vessels, but the end result would yield a much safer vessel commensurate with safe vessel construction and operating standards.
 The current SVCP program, however, is attempting to bring previously built and ill equipped vessels into conformity with modern day standards, almost overnight. Even though the Canada Shipping act was amended in 2001, it took 6 years to be passed into law in 2007.Since 2007 there have been a number of revisions to the Small Vessel Compliance Program and it has not been adequately promoted to our industry. Most of what we have heard has been by rumor. Over the last 45 days ,at the request of groups of small vessel owners, Transport Canada  agreed to conduct a number of “town hall “ meetings to inform us of the new SVCP and mandatory requirement for commercial vessel registration. As a result of these meetings, our Small Commercial Vessel Association was formed in an attempt to inform all parties concerned of their upcoming obligations. With most of the affected vessel owners still unaware of the new regulations, and only 65 days left until the June 30th deadline, we believe an extension to the SVCP and Small Commercial Vessel Registration is in order.
The remedial actions proposed in SVCP are in many cases extremely onerous or impossible from a retro fit perspective. Most vessels have sealed floors, bulkheads and generally limited access to  “below decks” spaces where access is required to perform the required inspections and subsequent  retro fits  to fuel and electrical systems, thereby making repairs extremely difficult and expensive.
We believe many older, but perfectly seaworthy vessels having “honest inspections” & having significant remaining service life, will be prematurely sidelined .The cost of the SCVP remedial action will exceed the market value of the vessel in many cases. The bigger concern is that with implementation of SVCP self inspection, many vessels will not undergo detailed inspections by a qualified inspector. The Blue Decal Self Inspection program will not succeed in making vessels safer.
Public & Vessel Safety needs to be considered before vessels are built so that appropriate systems can be installed before decks, bulkheads and engine compartments are sealed.
SVCP imposes extreme financial hardship on owners of vessels that were never designed to accommodate some of the remedial safety measures proposed. The practical time for implementation of the proposed safety protocols is before or during construction, not after.
Implementation of SVCP is like building a house and completing interior and exterior wall finishes, before attempting to design and install plumbing and electrical systems under a massive retro fit.


SCVA has many concerns about the current SVCP Guide but the most significant concerns are as follows.
1)    Requirement for Fire detection and Fire suppression systems on small commercial vessels. Ref. sections 82,83,84 of SVCP
On large vessels where engine rooms are far removed from the helm this is a vitally important requirement , however on small vessels where the operator can see , hear and smell the engine and drive systems , it is unnecessary and onerously expensive for vessel owners to install the required fire detection panel and dual action rate of rise temperature detectors . If a fire starts, the operator can smell the fire and detect the loss of power in the vessel due to the introduction of smoke into the air intake.
One or more standard issue fire extinguishers are already a requirement under carriage regulations. The introduction of an easily accessible “engine compartment”  fire extinguisher access port for use with hand held fire extinguishers, is an excellent method of suppressing a fire without opening the engine hatch and letting more oxygen into the engine space. These fittings are, however, not readily available for retro fit, therefore adequate time should be allowed in order for the industry to catch up with the new regulations.
2)    Requirement for sealed engine compartments Ref. Section 8 of SVCP
 Once again, on larger vessels, this is an appropriate strategy. On small commercial vessels, however, they were never originally designed to have “sealed” engine compartments. Most small vessels have their engines mounted just forward of the transom and many are covered with an engine hatch designed to protect against human contact with moving mechanical parts. They have necessary access to airflow under and around the engine hatches in order to supply fresh air for combustion and cooling.
In most cases the engine compartment is not sealed from the bilge areas ahead of the engine.
It would be a monumental and extremely expensive task to try and seal the engine compartments of such vessels.
 Because most of them are gasoline powered, the additional ventilation provided by the aforementioned access to fresh air is an extremely valuable asset because it keeps gasoline fumes from gathering in these areas which could be ignited during start up of the engine.


3)    Standards for fuel systems, shut off, connections, labeling & construction Ref. Sections 9,55,56,65 of SVCP
The current requirements for fuel shut off valves, connections, labeling, and minimum construction standard of the tank is a significant concern since all small vessels need to comply with these regulations. We do not want to downplay the importance of safe fuel handling on vessels , however the requirement to comply with the aforementioned regulations  is extremely difficult .From an inspection perspective , visual access to the fuel tanks and systems is not available on many existing vessels , as the tanks and lines are sealed below decks .

Fuel tanks and fuel delivery systems are customized to fit available spaces on small vessels and
in many cases the fuel tanks have tapered bottoms and shapes that are commensurate with the boat for which they were intended.
 These tanks are often buried below decks and behind bulkheads that are not easily accessible for tank inspection or removal, and many of these “custom shaped” fuel tanks will not comply with the ABYC standards for fuel tank construction.
 This means, vessel owners must remove the existing fuel tank, have a new one built by an approved contractor, who must in turn have that unique fuel tank tested and approved according to the ABYC standard.
This process would not only cost a fortune, but the time required for approval and retrofit would sideline the vessel indefinitely.

4)    Stability testing on boats built without capacity or conformity plate until 2011.Ref. Section 22 of SVCP
Discussion : In the early days of boat building , Coast Guard Ship Safety and Transport Canada had a requirement for a capacity or conformity plate to be mounted on the transom of small vessels that were built according to an approved standard .These plates defined safe working loads and numbers of passengers much like an elevator capacity plate .We’re not sure why , but for the last few years, Transport Canada did not require these  plates to be affixed , and they were optional.
Today, under the new requirements of the SVCP, vessels not equipped with Capacity and or conformity plates must undergo a stability test. We recently hired a naval architect to perform a stability test on a boat we had built and the cost was over $2,000.
It seems that this even applies to catamaran style sealed pontoon boats having a very low center of gravity and is among the most stable of them all.
Many children’s camps and other small organizations and use such vessels in extremely sheltered waters on small lakes because of their stability , ease of boarding , and affordability when compared with other small commercial vessels . The new requirement for very expensive stability testing is simply not appropriate for many of these vessels. It places an additional unrealistic economic burden on the small vessel owners.

5)    Requirement for installation of instrumentation and controls Ref. Section 74 of SVCP
 Section 14 question 74 of the inspection check list at the back of the book asks “Are instruments and controls permanently installed at every operating position?"(SVR 735)
The correlating explanation for the checklist found in the front of the book on page 14 of 18 item 74 says “Instruments and controls are to be provided at all normal operating positions and shall include (IF FITTED )…”
It then lists all the required gauges and equipment, i.e. fuel, temperature oil pressure etc.

A vessel owner performing a vessel self inspection would in most cases check off “YES” in the checklist because the guide is not clear and offers the apparent option of compliance by including the words (IF FITTED).

This section is extremely misleading because it creates a double standard and seems to indicate that the specified list of required instruments is “discretionary”.  By contrast, a qualified professional marine surveyor would never approve a vessel not equipped with appropriate gauges.

In addition there is a requirement for “indicators for steering equipment” under the list of appropriate inclusions of instruments. The majority of existing vessels do not have steering indicators at the helm and there does not appear to be any such requirement listed in the vessel construction regulations?

In summary, there are many examples of misleading information found in the SVCP guide and we would submit that the current guide is not appropriate for use by the general public.
The average vessel owner will not be able to comply with the provisions in the SVCP guide and therefore the checklists that they complete will not be accurate. The only way to ensure a successful inspection program is to appoint experienced marine surveyors and marine mechanics to perform the inspections.

 Small Vessel inspection stations could be established at qualified marinas having federally and provincially licensed professional staff.
This is the only way we will improve the safety of these vessels and in turn promote public marine safety.

Previous & Current Inspection Protocols
In previous years, a small commercial vessel owner could request that a certified TC marine inspector perform a survey of the vessel thereby giving the owner confidence that their vessel was safe & sound for the intended use.
We do not understand why Transport Canada has focused the majority of their efforts on ocean going lake freighters and have discontinued inspection of Small Commercial Vessels , particularly when by TC’s own account more than 80% of commercial vessels in this country are under 15 GT .
Transport Canada is also responsible for Aviation, Rail and Road Transportation.
We do not see any relaxation of inspection and accountability in these areas.
The provinces that regulate vehicular transportation under the Highway Traffic Act have not moved away from regular mandatory safety checks at vehicle inspection stations by licensed mechanics.
Can you imagine how unsafe our Skies, Railways & Highways would be and how many accidents and litigation would ensue if pilots, railway personnel & vehicle operators were asked to “self inspect” their own aircraft, Trains, cars and trucks without mandatory regulatory controls?
The current self inspection brochure and associated check list are simply too onerous and confusing for the average operator. If left in place as is, most operators will not be able to comply either because of confusion or affordability.
We believe that Transport Canada should return to the previous “Ship Safety’ – “Vessel Safety” inspection programs which was extremely helpful to vessel owners to ensure safety of these vessels.

General concerns about the lack of advertising and promotion of the new Regulations

We submit that Transport Canada have not promoted the new Small Commercial Vessel regulations to the public, specifically to small commercial vessel operators since they were made law in 2007. We estimate there are approximately 10,000 small commercial vessels under 15 gross tons in Ontario alone. During a Coroner’s inquest in 2007, a Transportation Safety Board representative estimated there were over 50,000 thousand such vessels in Canada according to the TC description of a “small commercial vessel”.
Since that time, very little has been done to inform the public of the significant changes in marine regulation.

As a result, the majority of small vessel owners are unaware of their obligations because they don’t realize they are designated commercial if using their boats for anything but pleasure.
June 30, 2012 is the deadline for registration of commercial vessels and the end of the grace period for the previous Canada Shipping Act marine regulations.
Currently there are an estimated 3,300 Vessels in the Transport Canada Commercial registry for Ontario. We are unable to confirm exact numbers at this time but we estimate that Transport Canada’s description of commercial vessels puts over 10,000 vessels in this category in Ontario as a whole.

How will Transport Canada possibly be equipped to deal with an estimated 6,700 applications for commercial marine registry in Ontario, along with tens of thousands of applications all over the country before the June 30th 2012 deadline for commercial vessel registration?
According to Transport Canada’s vessel registration guidelines, Chapter 3, the fines for unregistered vessels will be between $250 and $10,000 per day.

In our experience the registration process for a small commercial vessel in Canada will take a minimum of 3 months. In some cases it has taken up to 1 year. How will TC deal with the backlog of unregistered vessels and how will they enforce the new regulations?
The only appropriate solution is for TC to issue a 12 month extension to the June 30, 2012 deadline, to at least 2014 to allow the public to catch up.

This is one of the most economically challenging times in Canada and in the World.
The last thing we need right now is to place an unfair economic burden on the heavily taxed small business sector.



Summary of Concerns and Recommendations

·         Transport Canada should extend the SVCP and Small Vessel Registration until adequate industry consultation has taken place, and sufficient time is given the Small Commercial Vessel Industry
·         SVCP should be modified to include mandatory inspection by a qualified federally sanctioned inspection facility such as a marina. Private vessel owners are simply not equipped to deal competently with the self inspection of their vessel.
·         Consideration should be given to the definition of a small commercial vessel
·         Consideration should be given to an increase in the minimum size for the designation of a vessel as commercial
·         Vessels used solely for the transportation of a maximum of 6 passengers with light hand luggage should not be treated the same as cargo vessels carrying lumber and freight
·         No commercial vessel should be operated by an individual possessing a Pleasure Craft Operators Card because no adequate level of competency or proficiency has been established by the PCOC process.
·         The minimum standard for operation of a small commercial vessel should be equal to a  modified MED A-3 which includes mandatory instruction of “cold water boot camp”
·         Small commercial vessel personnel training should be expanded to include a new designation with training focused on the safe operation of small commercial cargo and passenger vessels. Current MED-A-3 and SVOP programs are not well suited for operation of these vessels.
·         No vessel should receive a Blue Decal or a Commercial Registration number unless the vessel complies with SVCP

Respectfully submitted by,
The Small Commercial Vessel Association
Ontario Region

Sincerely



Armin Grigaitis,
President

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