Cargo Securing Manuals
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Supplemental notice of proposed rulemaking.
CFR Part: "33 CFR Parts 97 and 160, and 46 CFR Part 97"
RIN Number: "RIN 1625-AA25 Formerly RIN 2115-AF97"
Citation: "78 FR 68784"
Document Number: "Docket No. USCG-2000-7080"
"Proposed Rules"
SUMMARY: The
   EFFECTIVE DATE: Comments and related material must either be submitted to the
   ADDRESSES: You may submit comments identified by docket number USCG-2000-7080 using any one of the following methods:
   (1) Federal eRulemaking Portal: http://www.regulations.gov.
   (2) Fax: 202-493-2251.
   (3) Mail: Docket Management Facility (M-30),
   (4) Hand delivery: Same as mail address above,
   To avoid duplication, please use only one of these four methods. See the "Public Participation and Request for Comments" portion of the SUPPLEMENTARY INFORMATION section below for instructions on submitting comments.
   Collection of Information Comments: If you have comments on the collection of information discussed in section VIII.D. of this preamble, you must also send comments to the
   Viewing incorporation by reference material: You may inspect the material proposed for incorporation by reference at room 1210, U.S. Coast Guard Headquarters,
   FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed rule, call or email Mr.
   SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Public Participation and Request for Comments
   A. Submitting Comments
   B. Viewing Comments and Documents
   C. Privacy Act
   D. Public Meeting
II. Abbreviations
III. Basis and Purpose
IV. Background and Regulatory History
V. Discussion of Comments and Changes
VI. Discussion of the Proposed Rule
VII. Incorporation by Reference
VIII. Regulatory Analyses
   A. Regulatory Planning and Review
   B. Small Entities
   C. Assistance for Small Entities
   D. Collection of Information
   E. Federalism
   F. Unfunded Mandates Reform Act
   G. Taking of Private Property
   H. Civil Justice Reform
   I. Protection of Children
   J. Indian Tribal Governments
   K. Energy Effects
   L. Technical Standards
   M. Environment
I. Public Participation and Request for Comments
   We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided.
A. Submitting Comments
   If you submit a comment, please include the docket number for this rulemaking (USCG-2000-7080), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. We recommend that you include your name and a mailing address, an email address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission.
   To submit your comment online, go to http://www.regulations.gov, and follow the instructions on that Web site. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope.
   We will consider all comments and material received during the comment period and may change this proposed rule based on your comments.
B. Viewing Comments and Documents
   To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, and follow the instructions on that Web site. If you do not have access to the internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the
C. Privacy Act
   Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the
D. Public Meeting
   We do not now plan to hold a public meeting. But you may submit a request for one to the docket using one of the methods specified under ADDRESSES. In your request, explain why you believe a public meeting would be beneficial. If we decide to hold a public meeting, we will announce its time and place in a later notice in the
II. Abbreviations
CFR Code of Federal Regulations
CSAP Cargo safe access plan
CSM Cargo Securing Manual
CSS Code Code of Safe Practice for Cargo Stowage and Securing
E.O. Executive Order
FR
MISLE Marine Information for Safety and Law Enforcement
NPRM Notice of proposed rulemaking
NVIC Navigation and Vessel Inspection Circular
SEC Section symbol
SANS Ship Arrival Notification System
SNPRM Supplemental notice of proposed rulemaking
U.S.C. United States Code
III. Basis and Purpose
   Sections 2103 and 3306 of Title 46, U.S. Code, provide the statutory basis for this rulemaking. Section 2103 gives the Secretary of the department in which the
   The purpose of this rulemaking is to align
IV. Background and Regulatory History
   Improperly secured maritime cargo threatens the safety of life, property, and the environment. Several maritime incidents dating from the early 1990s to the recent past underscore the risk of serious injury or death, vessel loss, property damage, and environmental damage caused by improperly secured cargo aboard vessels. A
   The SOLAS CSM requirements outline what a CSM must contain and establish strength requirements for securing devices and arrangements. They also describe how to stow and secure containers and other cargo. These SOLAS requirements are not yet mandatory for U.S. vessels or for foreign vessels operating in U.S. waters.
   In a notice (64 FR 1648;
   The first publication in this rulemaking was a notice of proposed rulemaking (NPRM) published
V. Discussion of Comments and Changes
   The 2000 NPRM drew comments from 15 sources, with two sources submitting two letters. Twelve commenters were companies or trade associations involved with maritime transportation. Two unions commented, as did a
   TSAC is a committee that advises the
   Two transportation companies (and a third company that said it agreed with one of the two) said that the NPRM's proposed regulatory text for 46 CFR 97.210(e) (cargo securing manual contents) and 46 CFR 97.230 (inspection and maintenance of cargo securing devices) would make useful additions to the SOLAS cargo securing requirements. Those provisions have been omitted from this supplemental notice of proposed rulemaking (SNPRM); the SNPRM addresses their topics by requiring CSMs to comply with applicable standards contained in the IMO's 2010 Maritime Safety Committee Circulars (MSC.1/Circ.) 1352 ("Cargo Stowage and Securing (CSS Code) Annex 14 Guidance on Providing Safe Working Conditions for Securing of Containers on Deck") and 1353 ("Revised Guidelines for the Preparation of the Cargo Securing Manual"). These two commenters also said that following a continuous examination program would ensure good equipment maintenance and be less burdensome than CSM regulatory requirements. Our SNPRM would allow, but not require, operators to follow a continuous examination program. It would describe, in proposed 33 CFR 97.205, when an approved CSM must be amended and re-approved. The two commenters recommended that fixed and portable cargo handling equipment be treated identically for regulatory purposes. Our proposed regulations would not require the use of either fixed or portable equipment. However, if portable equipment is used, it is subject to special provisions set out in the IMO Circulars, and incorporated by reference in proposed 33 CFR 97.110.
   Two transportation companies said we needed to ensure that our rulemaking does not create confusion between
   One transportation company said the NPRM should have approached safety issues relating to lashing cargo to decks. The same company said the NPRM should have addressed vertical tandem loading and cargo lifting devices. It said the
   These safety issues were also discussed in the
   The same company that raised the safety issues also expressed concern that
   Another transportation company expressed support for developing cargo securing standards that would apply specifically to seagoing barges. The commenter said the NPRM did not adequately assess the economic impact of applying cargo securing regulations to seagoing barges. The NPRM did not propose specific regulations for those vessels and thus did not calculate any regulatory economic impact on them. Seagoing barges in coastwise trade would not be affected by this SNPRM.
   A third transportation company said that most cargo losses result from container structural problems that the vessel operator cannot know about or prevent. To guard against such risks, this commenter said that hazardous material containers should be stowed as low as possible on the deck. We agree that once containers are loaded onto a vessel it is very difficult for a vessel operator to know about or prevent structural problems which have gone undetected. In this regard, much responsibility is placed on personnel associated with activities related to the transportation of the container through the supply chain before delivery of the container at a terminal, including personnel involved in packing the contents and personnel involved in storing and loading containers from shore. These personnel routinely conduct internal and external inspections to ensure that the container is suitable for transporting cargo and being lifted by container handling equipment. These routine periodic inspections help reduce the likelihood that structurally deficient containers will be loaded aboard a vessel. Vessel operators are then responsible for ensuring that the containers are stowed and secured in accordance with the CSM. Vessel operators who identify a structural deficiency in a container after it has been loaded should take whatever action is considered necessary to ensure the container is safely secured, handled, or removed as the specific situation may dictate. Stowage and transportation of hazardous materials on vessels is guided by 49 CFR Part 176 and the IMO Dangerous Goods Code which address hazardous materials according to each specific type of cargo, recognizing that various types of hazardous materials require special levels of handling. Our proposed rule addresses container integrity and stowage as it relates to the securing of cargo for safe transport by sea and incorporates by reference IMO Circulars MSC.1/Circ. 1352 and 1353 concerning that issue.
   A fourth transportation company said that no insured company would transport
   A fifth transportation company said that regulatory language suitable for larger ships would be unsuitable for smaller vessels in coastwise trade. This commenter also expressed concern over how much time would be needed for CSM approvals. As noted above, we have decided not to apply SOLAS-style cargo securing requirements to coastwise trade. By facilitating the use of third party organizations to approve CSMs, we hope to avoid lengthy delays. If you are preparing a CSM for approval, we encourage you to consult with your approval authority upfront to help eliminate unnecessary delays.
   A cargo gear company cautioned us against incorporating outdated industry standards in our regulations. This SNPRM proposes incorporating only IMO Circulars MSC.1/Circ. 1352 and 1353, which take into account the IMO's 2010 CSS Code. We invite public comment on that proposal.
   
   A seagoing barge operator said it was unclear whether the NPRM covers seagoing barges, and whether it relates only to hazardous materials or would cover non-hazardous materials as well. The NPRM discussed the possible extension of SOLAS-style cargo securing requirements to seagoing barges or other vessels in coastwise trade, but we have decided against that extension. The NPRM did not specifically limit its discussion to coastwise vessels carrying hazardous material. This SNPRM proposes regulations that would apply to seagoing barges in international trade. The regulations would also apply to vessels carrying any cargo that is not solely in liquid or solid bulk form.
   The NPRM invited comments on five options for extending SOLAS requirements for cargo securing on international voyages to voyages in U.S. coastwise trade. We have decided against such an extension because the cargo loss record of coastwise trade does not justify the regulatory costs that coastwise industry would have to bear. Nevertheless, the following discussion summarizes the public comment on the five options.
   Nine commenters commented on Option 1. Option 1 proposed extending SOLAS requirements to coastwise voyages. Two companies and the two unions chose Option 1 as their preferred option. One company said it would prefer a "compromise" between Options 1 and 2, with vessel-specific standards that would comply with or exceed SOLAS standards. The cargo gear company criticized Option 1 for not requiring regular CSM review. One company said Option 1 is too restrictive, and another company said it would require too much standardization. A seagoing barge operator said Option 1 would not work for seagoing barges, because no two barge cargoes are the same.
   Five commenters commented on Option 2. Option 2 proposed allowing each coastwise voyage vessel to set and document its own standards, subject to
   Four commenters commented on Option 3. Option 3 proposed requiring a coastwise voyage vessel to obtain a surveyor's certificate of loading and securing, prior to departure, if the voyage would also be subject to
   Four commenters commented on Option 4. Option 4 proposed developing regulations that would allow each coastwise vessel owner to choose from among Options 1, 2, and 3. One commenter opposed Option 4, but did not make its reasons clear. The cargo gear company said Option 4 should be attractive to those who favor cargo securing regulations for domestic voyages, but did not express its own preference or opposition. A seagoing barge operator said the "menu of options" provided by Option 4 could cause confusion. A company said it opposes Option 4 because it combines the strengths, but also the weaknesses, of Options 1 through 3.
   Four commenters commented on Option 5. Option 5 proposed incorporating yet-to-be-developed coastwise voyage standards that industry might draft in cooperation with TSAC. One company expressed support but did not explain its preference for Option 5. Two companies expressed preference for Option 5 because it would allow for the development of standards that would be appropriate for different types of vessel and operational needs; one of the two said the exact language of Option 5 should be modified. A seagoing barge operator opposed Option 5 because it would not ensure the development of appropriate standards for different vessel types and operational needs.
VI. Discussion of Proposed Rule
   We are issuing this SNPRM, rather than proceeding directly to a final rule, for two reasons. First, much of the NPRM focused on the possible extension of SOLAS requirements to coastwise voyages. We wish to make it clear that we are no longer considering that extension, and that our proposed regulations would apply only to international voyages. Second, this SNPRM proposes some regulatory changes that were not discussed in the NPRM. For example, we propose additional language to help clarify what information needs to be reported when a cargo loss or jettisoning event occurs, and what constitutes such an event; and we propose new provisions for the use of classification societies or other third parties in approving CSMs.
   This SNPRM proposes incorporating by reference IMO Circulars MSC.1/Circ. 1352 and 1353. These Circulars provide much of the guidance that we attempted to provide in our 2000 NPRM, which was based on the more limited guidance then available from the IMO's 1996 Circular MSC.1/Circ. 745 ("Guidelines for the preparation of the Cargo Securing Manual"). Table 1 shows where the NPRM's proposed regulatory text is paralleled in the SNPRM.
Table 1--Regulatory Text Comparison, NPRM and SNPRM [All references are to proposed sections in 33 CFR, part 97] NPRM SNPRM General, 97.100-97.130 97.100-97.115 Cargo Securing Manual, 97.200-97.280 97.120 How will Cargo Securing Manual Requirements be Approved and 97.200-97.215 Enforced?, 97.300-97.350 Authorization of an Organization to Act on Behalf of the U.S., 97.300-97.320 97.400-97.480
   Reporting loss or jettisoning of cargo. We propose prescribing in 33 CFR parts 97 and 160 when and how the accidental loss or deliberate jettisoning of cargo at sea must be reported. Currently, 33 CFR 160.215 requires a vessel owner or operator to immediately notify the
   An additional concern is containers that sink. Sunken containers may no longer be a hazard to navigation, but they may pose long-term threats to the environment. Our proposed reporting and recordkeeping requirements would facilitate the long-term monitoring of sunken containers and any needed salvage or remediation.
   Incorporating SOLAS. We propose adding 33 CFR part 97 to incorporate the existing SOLAS requirements for CSMs on vessels of 500 gross tons or more traveling on international voyages and carrying any cargo other than solid or liquid bulk cargo. Smaller vessels would only have to follow those requirements if they so choose--but if they choose to have a CSM they would be bound by these proposed regulations just as if they were vessels of 500 gross tons or more, including the requirement that the CSM would need to be approved by an organization that we have authorized to do so under proposed 33 CFR part 97. As a practical matter, all existing vessels to which proposed 33 CFR part 97 would apply are already in compliance with SOLAS CSM requirements. Most foreign countries are parties to SOLAS and already enforce the SOLAS CSM requirements on their vessels. All U.S. vessels are already in compliance because they need SOLAS certificates to enter foreign ports and, to obtain those certificates, they have voluntarily complied with Coast Guard NVIC 10-97.
   NVIC 10-97 was based in part on IMO guidance contained in IMO Circular MSC.1/Circ. 745. That MSC Circular was updated on
   We propose provisions for approving and amending CSMs, and for handling disputes over CSM approval. We would cross-reference those provisions in the bulk solid cargo operations regulations in 46 CFR subpart 97.12.
   We propose that, as required by MSC Circular 1352, "Amendments to the Code of Safe Practice for Cargo Stowage and Securing (CSS Code)," any container vessel, subject to SOLAS, whose keel is laid on or after
   Classification societies. Finally, proposed 33 CFR part 97 would provide for our authorization of recognized classification societies and other third party organizations to review and approve CSMs on our behalf.
VII. Incorporation by Reference
   Material proposed for incorporation by reference appears in proposed 33 CFR 97.110. You may inspect this material at U.S. Coast Guard Headquarters where indicated under ADDRESSES. Copies of the material are available from the sources listed in
VIII. Regulatory Analyses
   We developed this proposed rule after considering numerous statutes and E.O.s related to rulemaking. Below we summarize our analyses based on these statutes or E.O.s.
A. Regulatory Planning and Review
   Executive Orders 12866 ("Regulatory Planning and Review") and 13563 ("Improving Regulation and Regulatory Review") direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
   This proposed rule is not a significant regulatory action under section 3(f) of E.O. 12866 (as supplemented by E.O. 13563) and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order.
1. Summary
   This proposed rule would amend the CFR by adding the following provisions:
    * Requirements for the reporting of lost or jettisoned cargo;
    * The CSM requirements of SOLAS and the guidance in NVIC 10-97; and
    * Procedures for authorization of third party organizations to review and approve CSMs on the
   Please reference Table 2 below for a summary of our analysis.
Table 2--Summary of Regulatory Economic Impacts Costs (7% discount rate) Proposed Description Affected Annualized Total Benefits changes population 1. Reporting Codify lost U.S. and$1,420 $9,970 Better of lost or or foreign-flag tracking and jettisoned jettisoned vessels engaged response of cargo cargo as a in transport to lost or hazardous or from a U.S. jettisoned condition port cargo. and specify data to be reported 2. CSM Codify SOLAS Owners/$45,903 $322,403 Increased requirements rules and operators of enforcement guidance 7,163 vessels: authority. from NVIC 26 U.S.- 10-97 flagged, 7,137 foreign-flagged 3. Approval Codify 6 currently$0 $0 Increased of guidance approved enforcement. authorized from NVIC organizations, organiza- 10-97 others applying tions for approval status
   Table 3 presents a summary of the 10-year cost schedule, showing total costs on an undiscounted basis and discounted at 7 percent and 3 percent rates.
Table 3--Summary of the 10-Year Total Cost to the International Cargo Industry andU.S. Government Undiscounted Total, discounted Year Industry Government Total 7% 3% 1$38,788 $500 $39,288 $36,718 $38,144 2 38,814 520 39,334 34,356 37,076 3 38,854 550 39,404 32,165 36,060 4 46,519 580 47,099 35,932 41,847 5 46,558 610 47,168 33,630 40,688 6 46,598 640 47,238 31,477 39,561 7 54,263 670 54,933 34,210 44,666 8 54,303 700 55,003 32,012 43,420 9 54,342 730 55,072 29,956 42,208 10 62,020 770 62,790 31,919 46,722 Total 481,059 6,270 487,329 332,375 410,392 Annualized 47,323 48,110
2. Affected Population
   The applicable population (those vessels subject to the proposed regulation) consists of U.S. and foreign-flagged vessels that:
    * Measure 500 gross tons or more,
    * Are engaged in international trade as indicated by currently having a SOLAS Cargo Ship Safety Certificate, and
    * Carry any cargo other than solid or liquid bulk commodities.
   The United States is a signatory state to SOLAS, and U.S.-flagged vessels in international trade must meet SOLAS requirements, including the CSM rules, to receive a SOLAS certificate. An extract from the
   The applicable foreign-flagged vessels are those that transit U.S. waters. The source for data on these vessels was the
Table 4--Total Applicable Population, Non-Bulk Cargo Vessels, 500+ Gross Tons Flag Vessels U.S. 26 Foreign 7,137 Total 7,163 Sources: MISLE & SANS.
3. Economic Analyses
   We include an analysis of the costs, benefits, and alternatives for each of the proposed rule's three provisions:
    * Requirements for the reporting of lost or jettisoned cargo;
    * CSM requirements; and
    * Approval of authorized organizations.
   a. Requirements for the Reporting of Lost or Jettisoned Cargo
   i. Current practices, applicable population, and description of changes and edits. As noted in section VI of this preamble, the current regulations require the
   FOOTNOTE 1 All data and industry reports refer only to containers when describing incidents involving lost or jettisoned cargo. We will assume that containers will continue as the only lost cargo in the future and refer to containers as the generic description of the involved cargo for this analysis. END FOOTNOTE
   FOOTNOTE 2 McNamara, James J., "Containers and Cargoes Lost Overboard",
   In this proposed rule we include requirements for the immediate reporting of lost or jettisoned cargo. We anticipate that adoption of these requirements will correct this underreporting and lead to some increased costs to industry. Table 5 presents the change matrix for modifying the reporting of hazardous conditions and summarizes the specific edit or change, the affected population, and the economic impact.
Table 5--Change Matrix for Reporting of Hazardous Conditions in 33 CFR Reference & description Affected population Economic impact 97.100 Applicability . . . (a)(1), U.S. U.S. cargo vessels 500+ None, administrative vessels GT, non-U.S. cargo only. vessels in U.S. waters 500+ GT 97.105 Definitions All vessels and approval None, administrative organizations only. 97.110 Incorporation by All affected vessels and None, administrative reference, lists IBR approval organizations only. references 97.115 Situation Vessels subject to the Costs for correction of requiring report, rule that lose cargo noncompliance with criteria for reporting overboard existing requirements. lost cargo 160.215(a), requirement Operators of vessels No change, new label of to report hazardous involved in incident existing text. condition resulting in hazardous condition 160.215(b), data to be Operators of vessels This requirement reported involved in incident references 97.115 and resulting in hazardous all costs are included condition there. Source:Coast Guard analysis.
   ii. Affected population and costs. The proposed rule applies to both U.S. and foreign-flagged vessels engaged in transport to or from U.S. ports. Therefore, the costs for reporting the lost or jettisoned cargo must be accounted for throughout the entire applicable population of 7,163 vessels, as reported in Table 4.
   For 2009 through 2011 there were only five incidents of containers lost or damaged at sea and reported to the
   As the base of our estimate we used the annual estimate of 4,000 containers lost at sea worldwide, as reported in the
   FOOTNOTE 3
   FOOTNOTE 4 See http://www.marad.dot.gov/documents/Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 7, "Global Vessel Calls by Country, 2011." END FOOTNOTE
   FOOTNOTE 5 See http://www.marad.dot.gov/documents/Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 3. "Containership Calls at U.S. Ports by Size, 2006-2011." END FOOTNOTE
   We used that 6.0 percent share to estimate that about 240 containers in U.S. traffic are lost annually (4,000 containers lost world-wide *
   
   FOOTNOTE 6 For information on
   FOOTNOTE 7
   When cargo is lost or jettisoned, the vessel staff already collects data for company purposes. /8/ Thus, the only additional cost for compliance with the proposed rule is the time to report the data to the
   FOOTNOTE 8 Captain
   The wage rate for the Master was obtained from the
   FOOTNOTE 9 Mean wage, http://www.bls.gov/oes/2011/may/oes535021.htm. END FOOTNOTE
   FOOTNOTE 10 Load Factor calculation, source: ftp://ftp.bls.gov/pub/special.requests/ocwc/ect/ececqrtn.pdf. END FOOTNOTE
   Similarly, it would take 0.25 hour for
   FOOTNOTE 11 http://www.uscg.mil/directives/ci/7000-7999/CI_7310_1M.pdf. END FOOTNOTE
   As shown in Table 6, the unit cost for reporting a lost or jettisoned cargo is
Table 6--Unit Cost for Reporting a Lost Container or Jettisoned Cargo Task Time Wage rate Cost (hours) Master to report incident 0.25$53 $13.25 Coast Guard data entry (E4) 0.25 40 10.00 Total 23.25 Sources: BLS,Coast Guard estimates.
   The baseline estimate of lost or jettisoned cargo incidents, the growth rate, and the unit cost data provide the inputs into the 10-year cost schedule. Table 7 displays the input data and the resulting cost estimates on an undiscounted basis and discounted at 7 percent and 3 percent interest rates.
Table 7--Cost Schedule for Reporting Lost or Jettisoned Cargo Discounted Year Estimated Rounded Industry CG Cost Total 7% 3% incidents incidents cost cost 1 50 50$663 $500 $1,163 $1,087 $1,129 2 52.45 52 689 520 1,209 1,056 1,140 3 55.02 55 729 550 1,279 1,044 1,170 4 57.72 58 769 580 1,349 1,029 1,199 5 60.55 61 808 610 1,418 1,011 1,223 6 63.52 64 848 640 1,488 992 1,246 7 66.63 67 888 670 1,558 970 1,267 8 69.89 70 928 700 1,628 948 1,285 9 73.31 73 967 730 1,697 923 1,301 10 76.90 77 1,020 770 1,790 910 1,332 Total 8,309 6,270 14,579 9,970 12,292 Annua- 1,420 1,441 lized
   To provide a breakout of costs by flag status, we extracted from the
Table 8--2011 Visits to U.S. Ports by Flag-Status of Vessels 500 Gross Tons or More, Non-Bulk Trade Flag Visits Percent U.S. 514 2.5 Foreign 20,242 97.5 Total 20,756 100.0 Source: USCG, SANS database.
   We produced a breakout for U.S. costs of lost or jettisoned cargo by applying the 2.5 percent of visits by U.S. flag vessels from Table 8 to the cost estimates from Table 7. Please note that U.S. costs include both costs to U.S.-flagged vessels and the
Table 9--Schedule for U.S. Costs for Reporting Lost or Jettisoned Cargo Discounted Year Estimated Rounded Industry CG cost Total 7% 3% incidents incidents cost cost 1 50 1$13 $10 $23 $21 $22 2 52.45 1 13 10 23 20 22 3 55.02 1 13 10 23 19 21 4 57.72 1 13 10 23 18 20 5 60.55 1 13 10 23 16 20 6 63.52 2 27 20 47 31 39 7 66.63 2 27 20 47 29 38 8 69.89 2 27 20 47 27 37 9 73.31 2 27 20 47 26 36 10 76.90 2 27 20 47 24 35 Total 200 150 350 231 290 Annual- 33 34 ized
   The costs of reporting lost or jettisoned cargo for non-U.S.-flag vessels are obtained by subtracting the U.S. costs, as reported in Table 9, from the costs as displayed in Table 7. Table 10 presents the results of these calculations.
Table 10--Schedule for Non-U.S. Costs for Reporting Lost or Jettisoned Cargo Discounted Year Estimated Rounded Industry CG cost Total 7% 3% incidents incidents cost cost 1 50 49$649 $490 $1,139 $1,064 $1,106 2 52.45 51 676 510 1,186 1,036 1,118 3 55.02 54 716 540 1,256 1,025 1,149 4 57.72 57 755 570 1,325 1,011 1,177 5 60.55 60 795 600 1,395 995 1,203 6 63.52 62 822 620 1,442 961 1,208 7 66.63 65 861 650 1,511 941 1,229 8 69.89 68 901 680 1,581 920 1,248 9 73.31 71 941 710 1,651 898 1,265 10 76.90 75 994 750 1,744 887 1,298 Total 8,110 6,120 14,230 9,738 12,001 Annual- 1,386 1,407 ized
   iii. Benefits. A 2011 news release from the
   FOOTNOTE 12 http://www.mbari.org/news/news_releases/2011/containers/containers-release.html. END FOOTNOTE
   The immediate benefit of the reporting provisions is that they would enhance the
   iv. Alternatives. We considered possible alternatives to the proposed rule. One possibility, as suggested in the NPRM, would be to limit the reporting of lost containers to only those containing hazardous materials. However, we consider any overboard container to be a potential hazard to navigation and, as noted above, the contents may pose a long-term threat to the marine environment. To ensure safety of navigation and the marine environment, we believe all lost or jettisoned cargo should be reported.
   Another option would be to reduce the amount of information to be sent to the
b. CSM Requirements
   i. Current practices, applicable population, and description of changes and edits. As stated in section IV of this preamble, current requirements for CSMs are located in SOLAS, with further implementing guidance included in NVIC 10-97. The
   Enforcement in U.S. ports is carried out by the
   Tables 11 and 12 present the change matrix for the edits to Title 33 and Title 46 of the CFR, respectively, that relate to the CSM requirements. Each matrix summarizes the specific edit or change, the affected population, and the economic impact.
Table 11--Change Matrix for Adding CSM Requirements to 33 CFR Reference & description Affected population Economic impact 97.100 Applicability . . . (a)(1), U.S. U.S. cargo vessels 500+ None, administrative vessels GT, non-U.S. cargo only. vessels in U.S. waters 500+ GT . . . (a)(2), voluntary U.S. vessels less than No change, codifies compliance 500 GT requesting guidance currently coverage located in NVIC. . . . (b), exemption for Ready Reserve and public None, these vessels Ready Reserve and public vessels currently exempted. vessels 97.105 Definitions All vessels and approval None, administrative organizations only. 97.110 Incorporation by All affected vessels and None, administrative reference, lists IBR approval organizations only. references 97.120 Cargo Securing Manuals . . . (a)(1), CSMs SOLAS vessels and Cost of developing CSM required non-U.S., non-SOLAS for noncompliant vessels noted with vessels. deficient CSMs by Coast Guard . . . (a)(2), CSAP Non-SOLAS vessels Edit to close regulatory required after 2015 gap. No costs, no current vessels affected and none expected in future. . . . (b), authorizes CG All U.S. and No cost, provides enforcement foreign-flagged vessels authority for current CG subject to the rule compliance activities. Source:Coast Guard analysis.
Table 12--Change Matrix for Edits to 46 CFR 97 That Apply to U.S. SOLAS Vessels Reference & description Affected population Economic impact 97.12-10, Cargo securing Owners and operators of Administrative edit, all manuals, new section to U.S. SOLAS vessels costs accounted for in reference new 33 CFR 33 CFR 97.120. 97.120 Source:Coast Guard analysis.
   ii. Affected population and costs. As stated in the preceding section VIII.A.3.i, the
   (1) In the absence of the proposed rule, the current deficiency rate for subject foreign-flagged vessels would continue.
   (2) Under the proposed rule, the increased enforceability posture from codifying the CSM rules will lead all vessels to comply with the SOLAS standards and NVIC guidance prior to entering U.S. waters. That is, the deficiency rate will be reduced to zero for foreign-flagged vessels.
   In the preceding section VIII.A.3.i, we reported that there were 8 deficiencies related to CMS from 2009-2011. These deficiencies are comprised of 4 that were missing sections or certain technical data, 3 that were missing approval from an authorized organization, and 1 that did not have its CSM on the vessel. Table 13 presents the data from 2009 through 2011 for the calculation of a deficiency rates by year and an annual average for the three years.
Table 13--Annual CSM Deficiency Rate Year Vessel CSM Deficiency rate examinations deficiencies (percent) 2009 3,901 3 0.08 2010 4,148 3 0.07 2011 3,930 2 0.05 Total (Sum for 11,979 8 0.07 examinations and deficiencies, average for rate)
   The population in year 1 of the estimate period is the foreign-flagged component of the affected population--7,137 vessels, as reported in Table 4. In the analysis of the reporting requirements, we cited the
   FOOTNOTE 13 See. "U.S. Port and Inland Waterways Preparing for Post Panamax Vessels", p. 10--"Forecast and Containerized Cargo": http://www.iwr.usace.army.mil/docs/portswaterways/rpt/June_20_U.S._Port_and_Inland_Waterways_Preparing_for_Post_Panamax_Vessels.pdf. END FOOTNOTE
   We used the
   At this time we do not have detailed information on the current and projected capacity utilization of container ships visiting U.S. ports, so we posited that the trips per year of the affected vessels would remain constant through the analysis period. With that assumption, we applied the 4.9 percent annual growth rate to the fleet of foreign-flagged vessels serving U.S. ports, starting with the baseline population of 7,137 vessels. The resulting estimates are shown in the "Affected Vessels" column of Table 14.
   The estimate of the number of deficient CSMs in any year equals the estimate of the vessel population that year times the deficiency rate. For example, the estimate for Year 1 is CSMs for 5 new foreign-flagged vessels (7,137 vessels * 0.07 percent).
   To obtain a current estimate for the cost of developing a cargo securing manual we contacted industry cargo securing subject matter experts in 2013 /14/ . These experts are familiar with the entire development of cargo securing manuals, including vessel survey, evaluation of the cargo securing equipment and procedures, preparing the manuals, and training the crews. From the information they provided, we estimate that the cost to develop a CSM will range between
   FOOTNOTE 14 These sources preferred not to be identified in order to protect proprietary information. END FOOTNOTE
   FOOTNOTE 15
Table 14--Cost of Upgrading Deficient CSMs [undiscounted and discounted at 7% and 3%] Discounted (A) Year (B) (C) Annual (D) New (E) CSM 7% 3% Affected deficiency CSMs (B Cost (D * vessels rate *C)$7,625 ) (percent) 1 7,137 0.07 5$38,125 $35,631 $37,015 2 7,487 0.07 5 38,125 33,300 35,936 3 7,854 0.07 5 38,125 31,121 34,890 4 8,239 0.07 6 45,750 34,902 40,648 5 8,643 0.07 6 45,750 32,619 39,464 6 9,067 0.07 6 45,750 30,485 38,315 7 9,511 0.07 7 53,375 33,239 43,399 8 9,977 0.07 7 53,375 31,065 42,135 9 10,466 0.07 7 53,375 29,032 40,907 10 10,979 0.07 8 61,000 31,009 45,390 Total 472,750 322,403 398,099 Annualized$45,903 $46,669
   As shown in Table 14, the total 10-year cost for upgrading CSMs at a 7% discount rate is
   iii. Benefits. The benefit of adding the SOLAS requirements and the NVIC guidance on CSMs to the CFR is increased
   iv. Alternatives. Alternatives were considered in this proposed rule. Alternatives include various ways to apply the requirements to prepare and implement CSMs to U.S.-flagged vessels in coastwise trade. As described in section V of this preamble, the 2000 NPRM presented five options for applying CSM regulations to U.S. domestic voyages. Table 15 presents descriptions of these options and a summary of the comments.
Table 15--Options to Extend CMS Requirements to U.S. Domestic Voyages Option No. Description Summary of comments 1 Extend SOLAS requirements to 4 supported, 5 opposed for domestic voyages these reasons: . Preferred compromise of Options 1 & 2 . Not requiring regular reviews . Too restrictive . Require too much standardization . Would not work for seagoing barges as no two barge cargoes are identical 2 Vessel specific standards, 1 supported, 5 opposed for Coast Guard approval these reasons: . Evaluate against experience with continuous examination program and noted similarity with Option 5 . Too many variables causing unneeded burden . Would not work, but did not give specific reasons . Second choice . Preferred compromise of Options 1 and 2 3 Certificate for carrying One commenter stated its hazardous materials decision would depend on specific requirements and 3 opposed for these reasons: . Surveyors for multiple voyages not feasible for cost and availability . Could not ensure surveyor availability . High costs of surveyors 4 Allow each vessel to choose One commenter noted that from among Options 1, 2, and companies supporting 3 domestic rules would find this attractive, but did not state its own opinion. Another stated that it combined the strengths and weaknesses of the other Options. One opposed for unstated reasons and another was opposed because the "menu of options" would cause confusion. 5 Standards developed with 3 supported, 1 for unstated industry reasons and 2 because of its flexibility; and 1 was opposed because it would not ensure meeting needs of different vessel types and operations
   The options presented in the NPRM were only outlined and did not have cost estimates. We developed a cost estimate for Option 1 that would extend SOLAS requirements to domestic vessels. We added these details to Option 1 to make the calculations:
    * The affected population will be U.S.-flagged vessels of 500 gross tons or more in coastwise trade. The geographic identification was vessels with coastwise route certifications. We identified 675 vessels from MISLE that met these requirements, which is comprised of 215 freight barges, 125 freight ships, and 335 offshore supply vessels.
    * In general, the vessels in the U.S. affected population for this alternative are smaller than the foreign-flagged vessels that comprise the affected population of the proposed regulation. Data comparisons for the U.S. fleet shows average gross tons of 8,165 and average length of 326 feet. The comparable data for the foreign-flagged vessels is average gross tonnage of 31,306 and average length of 619 feet. Therefore, we assigned for the unit cost of the U.S. coastwise vessels the low-end value of
    * A phase-in period was not in the NPRM, but we added a three-year phase-in period, to mitigate the burden on both vessel owners and the authorized approval organizations. We assume that vessel owners would distribute the certification of the manuals for their vessels evenly over the phase-in period. This would enable vessel owners and authorized approval organizations to schedule cargo securing approvals in conjunction with vessel down-time, such as scheduled examinations or times of vessel repairs and upgrades.
   With these parameters, we developed a 10-year cost schedule for Option 1. As the costs to foreign-flagged vessels would be the same for Option 1 as the preferred alternative, the data presented show the marginal costs for Option 1. The annualized cost, using a 7 percent discount rate would be
Table 16--Cost Estimate for Option 1, Extend CSM Requirements to Domestic Vessels Year Existing New vessels Total vessels Unit cost vessels 1 225 22 247$7,500 2 225 22 247 7,500 3 225 22 247 7,500 4 0 22 22 7,500 5 0 22 22 7,500 6 0 22 22 7,500 7 0 22 22 7,500 8 0 22 22 7,500 9 0 22 22 7,500 10 0 22 22 7,500 Total 675 220 895 Annualized
Table 16--Cost Estimate for Option 1, Extend CSM Requirements to Domestic Vessels Discounted Year Total cost 7% 3% 1$1,852,500 $1,731,308 $1,798,544 2 1,852,500 1,618,045 1,746,159 3 1,852,500 1,512,192 1,695,300 4 165,000 125,878 146,600 5 165,000 117,643 142,330 6 165,000 109,946 138,185 7 165,000 102,754 134,160 8 165,000 96,032 130,253 9 165,000 89,749 126,459 10 165,000 83,878 122,775 Total 6,712,500 5,587,425 6,180,765 Annualized 795,524 724,574
   The goal of this alternative would be to reduce the occurrence and impacts of lost containers in U.S. coastwise trade. However, the comments to the NPRM indicate that this is not a significant problem. One commenter stated that cargo losses from barges are rare, another stated that seagoing barges "are generally safe from cargo loss", and another commenter stated that "most cargo losses result from container structural problems that the vessel owner operator cannot know about or prevent." Recent data from MISLE supports the commenters. Specifically, MISLE has only five incidents from 2009-2011 of lost or damaged containers involving U.S. vessels in coastwise voyages. Additionally, our initial cost estimates, as presented in Table 16, indicate that industry would incur annualized costs, discounted at 7 percent, of nearly
c. Approval of Authorized Organizations
   The Coast Guard authorizes classification societies and other organizations to review and approve CSMs on its behalf. The procedures for these organizations are currently found in NVIC 10-97 and cover selection criteria, information required by organizations applying for authorization status, the
   Following the procedures in NVIC 10-39, the
   FOOTNOTE 16 List of classification societies authorizations: http://www.uscg.mil/hq/cg5/acp/docs/ClassSocietyAuths29May2013.pdf. END FOOTNOTE
   However, the NVIC is a guidance document only, and not legally enforceable. The proposed rule would incorporate these procedures from the NVIC into the CFR with only some minor editorial changes. Therefore, we believe there would be no additional regulatory costs associated with the codification of these application procedures. Table 17 presents the change matrix for the codification of the class society approval guidance into the CFR and summarizes the specific edit or change, the affected population, and the economic impact.
Table 17--Change Matrix for Incorporating Class Society Approval Procedures into 46 CFR Reference & description Affected population Economic impact 97.100 Applicability . . .(a)(3), New applicants No impact, codifies organizations applying application guidance for CSM approval currently prescribed by authority NVIC. 97.115 Situation Vessels subject to the Costs for correction of requiring report, rule that lose cargo noncompliance with criteria for reporting overboard existing requirements. lost cargo 97.200 CSM Approval for U.S. Vessels on International Voyages . . .(a)(1), authorized Owners, operators, and Administrative change, applicants include agents, of new U.S. NVIC only referenced owner, operator, or vessels in international owner. agent trade . . .(a)(2), CG Organizations applying No change, codifies oversight of approval for CSM approval application guidance authority applications authority currently located in NVIC. . . .(a)(3), application U.S. vessels in No change, codifies procedures international trade application guidance currently located in NVIC. . . .(a)(4), approval Authorized approval No change, codifies authority retains a copy organizations NVIC. . . .(b), approval Authorized approval No change, codifies letter contents organizations NVIC. . . .(c), disapproval Authorized approval No change, codifies procedures organizations application guidance currently located in NVIC. . . .(d), resubmit Owners and operators No change, codifies procedures resubmitting a CSM application guidance currently located in NVIC. . . .(e), documents kept Owners and operators of No change, codifies on vessel U.S. vessels subject to application guidance the rule currently located in NVIC. 97.205 Requirements for Owners and operators of No change, codifies amending an approved U.S. vessels subject to application guidance CSM, amending procedures the rule currently located in NVIC. 97.210 Appeals, appeals Owners and operators of No change, codifies procedures U.S. vessels subject to application guidance the rule and authorized currently located in approval organizations NVIC. 97.300 Authorized CSM ABS, Lloyds, Nat'l Cargo No change, codifies approval authorities, Bureau application guidance lists approved currently located in organizations NVIC. 97.305 Requests for Organizations seeking to No change, codifies authorization, become approved application guidance application process organizations currently located in NVIC. 97.310 Criteria for CG and organizations No change, codifies authorization, seeking to become application guidance evaluation criteria approved organizations currently located in NVIC. 97.315 Requirements for CG and authorized No change, rewords and authorized approval approval organizations codifies application organizations, guidance currently responsibilities of CG located in NVIC. and authorized approval organizations 97.320 Revocation of CG and referenced No change, revises and authorization, organizations codifies application procedures for CG guidance currently revoking an located in NVIC. authorization Source:Coast Guard analysis.
   We considered alternatives to the proposed changes and edits, however, we concluded that there are no viable alternatives. The procedures in the NVIC provide a complete description of all processes needed for approval and oversight of the subject organizations. Reducing or eliminating any of them, such as the one covering appeals, would leave a gap in the approval or oversight processes. We did not identify any current weaknesses or gaps in the NVIC, other than the proposed editorial changes. We also concluded that the recordkeeping guidance in the NVIC provides complete documentation for all the involved parties--vessel owners, approved organizations. Reducing or eliminating any of the proposed recordkeeping rules would run the risk of producing a gap in the documentation. Conversely, adding additional recordkeeping rules would only increase associated burdens, but not provide any additional useful information.
   In summary, the proposed rules governing organizations approved to issue CSMs would codify current procedures with no associated costs to industry or the government. The benefit of these proposed rules is that it would provide a regulatory basis for the
   d. Review of Costs and Benefits. The total cost of the proposed rule is for the two cost elements: (1) Lost or Jettisoned Cargo and (2) CSM Requirements. Table 18 presents the ten-year cost schedule for undiscounted costs and discounted costs at 7 percent and 3 percent rates.
Table 18--Summary of the 10-Year Total Cost to the International Cargo Industry andU.S. Government (A) (B) (C) (D) (E) (F) (G) (H) CSM Lost or Jetti- Total Total Discounted requireme soned (2) cargo industry cost nts (1) Year Industry Industry CG (B+C) (D+E) 7% 3% 1$38,125 $663 $500 $38,788 $39,288 $36,718 $38,144 2 38,125 689 520 38,814 39,334 34,356 37,076 3 38,125 729 550 38,854 39,404 32,165 36,060 4 45,750 769 580 46,519 47,099 35,932 41,847 5 45,750 808 610 46,558 47,168 33,630 40,688 6 45,750 848 640 46,598 47,238 31,477 39,561 7 53,375 888 670 54,263 54,933 34,210 44,666 8 53,375 928 700 54,303 55,003 32,012 43,420 9 53,375 967 730 54,342 55,072 29,956 42,208 10 61,000 1,020 770 62,020 62,790 31,919 46,722 Total 472,750 8,309 6,270 481,059 487,329 332,375 410,392 Annual- 47,323 48,110 ized
   Table 19 presents the U.S.-based breakout of the 10-year cost data. The CSM plans would affect only foreign-flagged vessels and there are no associated U.S. government costs, so the only inputs to U.S. costs are those associated with the proposed reporting requirements for lost or jettisoned cargo. As described earlier, these requirements would accrue costs to both industry and government. The estimates for both sectors are in Table 18.
Table 19--Costs to U.S.-Flagged Vessels in International Cargo Industry andU.S. Government for Reporting of Lost or Jettisoned Cargo Undiscounted Total Year Industry Government Total Discounted 7% 1$13 $500 $513 $479 $498 2 13 520 533 466 502 3 13 550 563 460 515 4 13 580 593 452 527 5 13 610 623 444 537 6 27 640 667 444 559 7 27 670 697 434 567 8 27 700 727 423 574 9 27 730 757 412 580 10 27 770 797 405 593 Total 200 6,270 6,470 4,419 5,452 Annualized 629 639
   Table 20 displays the breakout of the 10-year cost schedule for foreign-flagged vessels. These foreign-flagged vessels would incur costs involving both proposed requirements: CSM plans and reporting of lost and jettisoned cargo. Estimates for both requirements and the total cost are included in Table 20.
Table 20--Costs for Foreign-Flagged Vessels in International Cargo Industry for CSM Requirements Undiscounted Discounted Year CSM plans Reporting of Total 7% 3% lost or jettisoned cargo 1$38,125 $649 $38,774 $36,237 $37,645 2 38,125 676 38,801 33,890 36,574 3 38,125 716 38,841 31,706 35,545 4 45,750 755 46,505 35,478 41,319 5 45,750 795 46,545 33,186 40,150 6 45,750 822 46,572 31,033 39,003 7 53,375 861 54,236 33,775 44,099 8 53,375 901 54,276 31,589 42,846 9 53,375 941 54,316 29,544 41,629 10 61,000 994 61,994 31,515 46,129 Total 472,750 8,110 480,860 327,953 404,939 Annualized 46,693 47,471
   The primary benefit of this proposed rule is that it would place into the CFR rules and procedures for the cargo securing plans, the approval and oversight of organizations authorized to approve CSMs, and the reporting of lost or jettisoned cargo. Additionally, the reporting requirements for the lost or jettisoned cargo would provide the
B. Small Entities
1. Summary of Findings
   Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term "small entities" comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
   We determined that this proposed rule affects a variety of large and small businesses, not-for-profit organizations, and governments (see the "Description of the Potential Number of Small Entities" section below). We have prepared the following initial regulatory flexibility analysis assessing the impact on small entities from the rule. Based on the information from this analysis, we found:
    * There are an estimated 1,217 entities that control the 7,163 vessels that could be economically impacted by the proposed rule. Using size standards from the
    * Compliance actions would consist of upgrading deficient CSMs and reporting lost or jettisoned cargo.
    * Of the small entities in our sample with revenue information, 60 percent of them had an impact of less than 1 percent and 20 percent had an impact within the 1 percent to 3 percent range.
2. Initial Regulatory Flexibility Analysis
   The Regulatory Flexibility Act of 1980 (5 U.S.C.
   Under the RFA, we are required to consider if this rule will have a significant economic impact on a substantial number of small entities. Agencies must perform a review to determine whether a rule will have such an impact. If the agency determines that it will, the agency must prepare an initial regulatory flexibility analysis as described in the RFA.
   Under Section 603(b) and (c) of the RFA, the initial regulatory flexibility analysis must provide and/or address:
    * A description of the reasons why action by the agency is being considered;
    * A succinct statement of the objectives of, and legal basis for, the proposed rule;
    * A description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply;
    * A description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record;
    * An identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule; and
    * Descriptions of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.
   a. A description of the reasons why action by the agency is being considered. Agencies take regulatory action for various reasons. One reason is to harmonize the CFR with requirements and guidance located in other sources. The primary purpose of this proposed rule is to incorporate into the CFR the cargo securing manual rules from SOLAS, as the U.S. is a signatory state to that treaty.
   Another of the reasons is the failure of the market to compensate for negative externalities caused by commercial activity. A negative externality can be the by-product of a transaction between two parties that is not accounted for in the transaction. As discussed in the regulatory analysis, this proposed rule is addressing a negative externality, which is that unreported lost or jettisoned cargo could collide with other vessels with hazardous consequences to other vessels, human health, or the environment. The proposed rule mandates that all occurrences of lost or jettisoned cargo must be reported to the
   b. A statement of the objectives of, and legal basis for, the proposed rule. The
   Sections 2103 and 3306 of Title 46, U.S. Code, provide the statutory basis for this rulemaking. Section 2103 gives the Secretary of the department in which the
   c. A description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply.
Table 21--Non-U.S. Vessels by Type of Entity Entity type Count Percent Business(17M) 7,104 99.54 Government 32 0.45 Not-for-Profit 1 0.01 Total 7,137 100.00
   All the government entities exceed the threshold for being classified as a small entity as they are either agencies of a foreign government or exceed the 50,000 population threshold. We excluded these government entities from the revenue impact analysis. The single not-for-profit entity is also deemed not small as it is part of an international organization.
   FOOTNOTE 17 A vessel may have a separate owner, operator, and charterer. Operational control may be with any one of these companies, depending on type of owner (i.e., a passive ownership by a financial institution) or the type of operating or chartering contract. Also, the country that the vessel is registered in can be different than the country of the owner. END FOOTNOTE
   To analyze the potential impact on the businesses, we produced a random sample with a 95 percent confidence level and a confidence interval of 5 percent. /18/ The resulting sample consisted of 299 businesses. We researched public and proprietary databases for the location of the company, entity type (subsidiary or parent company), primary line of business, employee size, revenue, and other information. /19/ During the initial research we found 6 duplicated businesses and an additional one whose business was out of the scope of this rulemaking. Deleting these 7 businesses from our initial sample of 299 resulted in a working sample consisting of 292 businesses. We found that 217 of the companies in our sample are based in countries other than the U.S. We therefore excluded these non-U.S. companies from this revenue impact analysis.
   FOOTNOTE 18 We selected a statistical sample so we would not need to research and collect employee size and revenue information for the entire affected operator population. We selected the operators in the sample through a random number generator process available in most statistical or spreadsheet software. END FOOTNOTE
   FOOTNOTE 19 We used information and data from Manta (http://Manta.com) and ReferenceUSA (http://www.referenceusa.com). END FOOTNOTE
   The population for the revenue impact analysis consists of the remaining 75 businesses from the working sample. Of those 75, we found address information that locates 70 of them in the U.S. The remaining five are businesses for whom we could find no information; we assumed that they are located in the U.S. and are small businesses.
   We researched and compiled the employee size and revenue data for the 70 U.S. businesses and we compared this information to the
   FOOTNOTE 20 The SBA lists small business size standards for industries described in the North American Industry Classification System. See http://www.sba.gov/content/table-small-business-size-standards. END FOOTNOTE
Table 22--U.S. Business by Size Determination Location Entity type U.S. Unknown Count Percent Exceed the threshold 23 0 23 30.7 Below the threshold 20 0 20 26.7 Unknown 27 5 32 42.7 Total 70 5 75 100.0
   The percentage of entities affected by this rule is distributed among 14 NAICS classified industries. Table 23 lists the frequency, percentage, and size standard, and size threshold of NAICS codes for the 20 small businesses found in the sample.
Table 23--NAICS Codes of Identified Small Businesses NAICS Industry Count Percent Size Threshold code standard (revenue in
|% millions)
423860 Transportation 3 15.0 Employees 100 Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers 483211 Inland Water Freight 3 15.0 Employees 500 Transportation 488510 Freight Transportation 2 10.0 Revenue 14 Arrangement 336611
   We selected the three industries that appeared most frequently in the random sample of entities. Businesses from these three industries accounted for approximately 40 percent of the entities in the random sample. Therefore, we can assume that approximately 40 percent of all entities affected by this regulation will be in one of these industries. A brief description of industries affected most by this rule is presented below:
    * Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers (423860): This industry comprises establishments primarily engaged in the merchant wholesale distribution of transportation equipment and supplies (except marine pleasure craft and motor vehicles).
    * Inland Water Freight Transportation (483211): This U.S. industry comprises establishments primarily engaged in providing inland water transportation of cargo on lakes, rivers, or intracoastal waterways (except on the Great Lakes System).
    * Freight Transportation Arrangement (488510): This industry comprises establishments primarily engaged in arranging transportation of freight between shippers and carriers. These establishments are usually known as freight forwarders, marine shipping agents, or customs brokers and offer a combination of services spanning transportation modes.
   d. A description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record. The compliance requirements of the proposed rule consist of upgrading deficient CSMs and reporting lost or jettisoned cargo. Therefore, this proposed rule would call for a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Details on the burden estimate associated with this collection is available in section VIII.D of this preamble.
   As discussed in section VIII.A, in 2009 through 2011 the
   For reporting lost or jettisoned cargo, we noted in section VIII.A cost discussions that when one of these incidents occurs, the vessel staff already collects the needed information for company purposes. Thus, the only additional cost to the vessel is to report this information to the
   As discussed in section VIII.A, we adjusted the affected population to account for anticipated growth in container traffic. In our ten-year analysis, we estimate that the number of vessels that would need to upgrade their CSM would be 5 in year one each of and increase to 8 in year ten. We also accounted for this growth in container traffic in our estimate of lost or jettisoned cargoes. In the section VIII.A cost discussions we estimate that in the first year the rule would become effective, 50 incidents of lost or jettisoned cargo would occur. We estimate that the affected population in that year consists of 7,163 vessels, yielding an incident rate of 0.7 percent (50 incidents/7,163 vessels). To execute a revenue impact analysis we posited that in any given year each business would have one vessel that would need to upgrade its CSM and that one of their vessels would have an incident of lost or jettisoned cargo. Given these assumptions, the total annual compliance cost for any company is
Table 24--Annual Compliance Cost for Revenue Impact Analysis Loaded wage Hours Total cost Cost to upgrade 1 CSM N/A N/A$7,625 Cost to report 1 hazardous condition 53 0.25 13.25 Total 7,638.25
   For each business in our sample with revenue data, we calculated the impact as the assumed cost of
Table 25--Estimated Revenue Impact on Small Businesses Impact class Count Percent <1% 12 60.0 1%-3% 4 20.0 >3% 4 20.0 Total 20 100.0
   As shown in Table 18, the highest cost to industry in any one year on an undiscounted basis is
   e. An identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap or conflict with the proposed rule. This proposed rule does not duplicate or conflict with other Federal rules. This rulemaking concerns vessel operations and the
   f. Descriptions of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities. Alternatives were considered in this proposed rule and are discussed in section VIII.A of this preamble. Alternatives include various ways to apply the requirements to prepare and implement CSMs to U.S.-flagged vessels in coastwise trade. However, we concluded that standards developed for international trade cannot be economically justified for vessels operating only domestically at this time. Therefore, the focus of this rulemaking is exclusively on vessels in international trade.
C. Assistance for Small Entities
   Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult Mr.
   Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to
D. Collection of Information
   This rule would call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5 CFR 1320.3(c), "collection of information" comprises reporting, recordkeeping, monitoring, posting, labeling, and other similar actions. The title and description of the information collection, a description of those who must collect the information, and an estimate of the total annual burden follow. The estimate covers the time for preparing and reporting for the development of a CSM, revising a CSM, notification of other hazardous conditions, and notification of lost or jettisoned cargo.
   This collection of information applies to rulemaking procedures regarding cargo securing manuals. Specific areas covered in this information collection include 33 CFR Part 97, "Cargo Securing Manuals;" 33 CFR Part 160, "Ports and Waterways Safety-General;" and 46 CFR Part 97, "Operations." This rule would align the CFR with SOLAS.
   Title: Cargo Securing Manuals.
   OMB Control Number: 1625-NEW
   Summary of Collection of Information: The rule would add a new part 97, "Cargo Securing Manuals" to chapter 33 of the CFR. The collection of information burden for CSMs derives from one of these three events:
    * A SOLAS container vessel built after the rule becomes effective would need to develop and implement a CSM. The new vessel will need an approved CSM.
    * If a vessel changes its type, the CSM must be revised. An example of a type change is when a general break-bulk carrier is modified to become a containership.
    * If an existing vessel either changes 15 percent of its cargo securing systems or more than 15 percent of its portable securing devices, then the CSM must be revised.
   Additionally, the rule would impose burdens for the notification of hazardous conditions. Currently, these notifications are made via VHS radio, satellite radio, cell phones, and other forms of electronic communication. The proposed rule specifically allows for electronic communications and we anticipate this will continue to be how the notifications are transmitted.
   Need for Information: Vessel owners and operators need to develop and implement CSMs to fulfill international safety standards established by SOLAS. The
   Proposed Use of Information: For new and modified CSMs,
   Description of Respondents: There are two groups of respondents impacted by this rule. The first group consists of owners and operators of U.S.-flagged vessels that need to submit new or revised CSMs to the recognized classification societies. The second group consists of the operators of vessels that would be required to report hazardous conditions.
   Number of Respondents: We estimate that there would be 149 respondents affected annually by the proposed CSM requirements. The total is divided into these two classes: (1) 6 related to CSM plans, and (2) 143 for notifications of hazardous conditions, which include lost or jettisoned cargo and other incidents. Table 26 describes the calculations for developing the estimates of each requirement relating to the CSM plans.
Table 26--Estimates of Number of Respondents Class Requirement Description Count Total CSM Plans Develop From U.S. 3 CSM--new vessel vessel population data of 26 vessels (Table 4), average new builds 2009-2011 Revise MISLE data 0 CSM--change in shows none of vessel type the affected vessels have changed vessel type from 2001-2012 Revise Annual rate of 3 CSM--replace 11.3% from CSM systems or information equipment supplied by an approved organization. Applied to U.S. population (see Table 4), (26 * 11.3%) CSM Total 6 Notifications Notifications From MISLE, 141 of hazardous average of condition 2009-2011 notifications Notifications U.S. 2 of lost or notifications, jettisoned Table 9, year cargo 10 Notifications 143 Total Grand Total 149
   Frequency of Response: A CSM is valid indefinitely, as long as it does not meet any of the conditions for a revision. The reporting of hazardous conditions occurs as needed. In the subsequent "Number of Respondents" section, we present annual estimates of the reports.
   Burden of Response: The burden hours per requirement is estimated and shown below in Table 27.
Table 27--Annual Burden Hours Per Request Requirement Hours Notes Develop new CSM 48 8 hours to survey the vessel and 40 hours to draft the CSM. Revise CSM--change in vessel type 48 8 hours to survey the vessel and 40 hours to draft the CSM. Revise CSM--change in cargo 20 20 hours to revise the existing securing systems or equipment CSM. Notification of hazardous 0.25 0.25 hours for vessel crew to condition prepare and transmit the notice. Notification of lost of 0.25 0.25 hours for vessel crew to jettisoned cargo prepare and transmit the notice.
   Estimated Total Annual Burden: We estimate that the total annual burden to industry will be 240 hours (rounded). Table 28 displays the total burden hours for each request:
Table 28--Total Annual Burden Hours Requirement Hours Develop new CSM 144 Revise CSM--change in vessel type 0 Revise CSM--change in cargo securing systems or equipment 60 Notification of hazardous condition 35.25 Notification of lost of jettisoned cargo 0.5
   Reason For Proposed Change: The rule would require collections of information regarding these two activities: (1) development or revision of a CSM, and 2) notification of hazardous conditions, including lost or jettisoned cargo.
   As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we will submit a copy of this SNPRM to OMB for its review of the collection of information.
   We ask for public comment on the proposed collection of information to help us determine how useful the information is; whether it can help us perform our functions better; whether it is readily available elsewhere; how accurate our estimate of the burden of collection is; how valid our methods for determining burden are; how we can improve the quality, usefulness, and clarity of the information; and how we can minimize the burden of collection.
   If you submit comments on the collection of information, submit them both to OMB and to the Docket Management Facility where indicated under ADDRESSES, by the date under DATES.
   You need not respond to a collection of information unless it displays a currently valid control number from OMB. Before the collection requirements in this final rule can be enforced, OMB must approve
E. Federalism
   A rule has implications for federalism under E.O. 13132, Federalism, if it has substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under E.O. 13132 and have determined that it does not have implications for federalism. Our analysis follows.
   It is well settled that States may not regulate in categories reserved for regulation by the
   This proposed rule on cargo securing falls into the category of vessel operation. Because the States may not regulate within this category, preemption under E.O. 13132 is not an issue.
F. Unfunded Mandates Reform Act
   The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of
G. Taking of Private Property
   This proposed rule would not cause a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
H. Civil Justice Reform
   This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of E. O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
I. Protection of Children
   We have analyzed this proposed rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
J. Indian Tribal Governments
   This proposed rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
K. Energy Effects
   We have analyzed this proposed rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a "significant energy action" under that order because it is not a "significant regulatory action" under E.O. 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the
L. Technical Standards
   The National Technology Transfer and Advancement Act (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides
   This proposed rule uses technical standards other than voluntary consensus standards. It incorporates guidance developed by the IMO, an international organization under
M. Environment
   We have analyzed this proposed rule under
List of Subjects
   33 CFR Part 97
   Cargo stowage and securing, Cargo vessels, Hazardous materials, Reporting and recordkeeping requirements, Incorporation by reference.
   33 CFR Part 160
   Administrative practice and procedure, Harbors, Hazardous materials transportation, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Vessels, Waterways.
   46 CFR Part 97
   Cargo vessels, Marine safety, Navigation (water), Reporting and recordkeeping requirements.
   For the reasons discussed in the preamble, the
TITLE 33--NAVIGATION AND NAVIGABLE WATERS
   1. Add part 97 to read as follows:
PART 97--RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND SECURING OF CARGOES
Subpart A--CARGO SECURING MANUALS
97.100 Applicability--Electronic documentation.
97.105 Definitions.
97.110 Incorporation by reference.
97.115 Reporting lost or jettisoned cargo.
97.120 Cargo securing manuals.
97.121-97.199 [Reserved]
97.200 Cargo securing manual (CSM) approval for U.S.-flagged vessels on international voyages.
97.205 Requirements for amending an approved cargo securing manual (CSM).
97.210 Appeals.
97.211-97.299 [Reserved]
97.300 Authorized cargo securing manual (CSM) approval authorities.
97.305 Requests for authorization to act as cargo securing manual (CSM) approval authority.
97.310 Criteria for authorization.
97.320 Requirements for authorized approval organizations.
97.320 Revocation of authorization.
Subpart B--[Reserved]
   Authority: 46 U.S.C. 2103, 3306; E.O. 12234;
PART 97--RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND SECURING OF CARGOES
Subpart A--Cargo Securing Manuals
   (a) This part applies to--
   (1) A vessel of 500 gross tons or more on an international voyage that must comply with Chapter VI/5.6 or Chapter VII/5 of the
   (2) A U.S.-flagged cargo vessel that is less than 500 gross tons but that chooses to have this part applied to it by submitting a cargo securing manual for approval in accordance with
   (3) A foreign-flagged cargo vessel of 500 gross tons or more on an international voyage from a country not signatory to SOLAS that would otherwise be required to comply with Chapter VI/5.6 or Chapter VII/5 of SOLAS and that does not solely carry liquid or solid cargoes in bulk and is operating in waters subject to the jurisdiction of
   (4) Any organization applying to be selected as a cargo securing manual approval authority.
   (b) This part does not apply to a vessel owned by the
   (c) Any manual, letter, request, appeal, or ruling required by this part may be provided or submitted in electronic form as well as in printed form.
   As used in this part--
   Approval authority means a CSM approval authority, as that term is defined in this section.
   Cargo means the goods or merchandise conveyed in a vessel, and includes but is not limited to cargo that can be measured as a "cargo unit" as that term is used in the
   Cargo safe access plan (CSAP) means a plan included in the cargo securing manual that provides detailed information on safe access for persons engaged in work connected with cargo stowage and securing on ships that are specifically designed and fitted for the purpose of carrying containers.
   Cargo securing manual (CSM) means an electronic or printed manual developed to meet the requirements of SOLAS and this part that is used by the master of a vessel to properly stow and secure cargoes on the vessel for which it is developed.
   Cargo securing manual approval authority or CSM approval authority means an organization that meets the requirements of this part, and that the Commandant has authorized to conduct certain actions and issue electronic or printed approval letters on behalf of
   Captain of the Port (COTP) means the
   Commandant, except as otherwise specified, means the Chief,
   Container means an article of transport equipment described in 49 CFR 450.3.
   Container vessel means a vessel specifically designed and fitted for the purpose of carrying containers.
   International voyage means a voyage between a port or place in one country (or its possessions) and a port or place in another country.
   (a) Certain material is incorporated by reference into this part with the approval of the Director of the
   (b)
   (1) Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353), Guidelines for the Preparation of the Cargo Securing Manual,
   (2) Maritime Safety Committee Circular 1352 (MSC.1/Circ.1352), Cargo Stowage and Securing (CSS Code) Annex 14 Guidance on Providing Safe Working Conditions for Securing of Containers on Deck,
   (3) Assembly Resolution 739(18) (Res.A.739(18)), Guidelines for the Authorization of Organizations Acting on Behalf of the Administration,
   (a) In the event a vessel loses or jettisons at sea any cargo described in paragraph (b)(1) of this section, it must comply with the immediate notification requirements of 33 CFR 160.215, and if the cargo contains hazardous material as defined in paragraph (b)(2) of this section the vessel must also report as soon as possible in accordance with 49 CFR 176.48.
   (b)(1) The cargo to which this section applies includes any container, and any other cargo the loss or jettisoning of which could adversely affect the safety of any vessel, bridge, structure, or shore area or the environmental quality of any port, harbor, or navigable waterway of
   (2) As used in this section, "hazardous material" means a substance or material designated by the Secretary of Transportation as capable of posing an unreasonable risk to health, safety, and property when transported in commerce. The term includes hazardous substances, hazardous wastes, marine pollutants, and elevated temperature materials as defined in 49 CFR 171.8, materials designated as hazardous under the provisions of 49 CFR 172.101, and materials that meet the defining criteria for hazard classes and divisions in 49 CFR part 173.
   (a)(1) Any vessel to which this part applies must have a cargo securing manual (CSM) on board that has been approved by the government of the country whose flag the vessel is entitled to fly; and a CSM approved after
   (2) A container vessel with a keel laid on or after
   (b) While operating in waters under the jurisdiction of
SUBSEC 97.121-97.199 [Reserved]
   (a)(1) An applicant for CSM approval may be the owner or operator of the vessel, or a person acting on the owner or operator's behalf.
   (2) The Commandant is responsible for overseeing and managing the review and approval of approval authority applications and provides an up-to-date list of organizations authorized to act under this subpart, which is available at http://www.uscg.mil/hq/cg5/cg522/cg5222 or by requesting it in writing from the Commandant and enclosing a self-addressed, stamped envelope.
   (3) The applicant must submit two dated copies of a CSM that meets the requirements of this part to a CSM approval authority for review and approval. If any amendments are submitted they must be dated. The CSM must include a "change page" document to ensure continuous documentation of amendments made and the dates they were completed.
   (4) The approval authority will retain one copy of the CSM for its records.
   (b) If the approval authority completes the review process and approves the CSM, the approval authority will provide a CSM approval letter on its letterhead, containing--
   (1) Date of CSM approval;
   (2) A subject line reading: "APPROVAL OF CARGO SECURING MANUAL (AMENDMENT--if applicable) FOR THE M/V ____, OFFICIAL NUMBER ____";
   (3) The following statement: "This is to certify that the Cargo Securing Manual (Amendment--if applicable) dated ____ for the M/V ____, Official Number ____, has been approved on behalf of
   (4) Signature of the approval authority official responsible for review and approval of the CSM; and
   (5) The approval authority's seal or stamp.
   (c) If the approval authority completes the review process and disapproves the CSM, the approval authority will provide a letter on its letterhead, containing--
   (1) Date of CSM disapproval; and
   (2) Explanation of why the CSM was disapproved and what the submitter must do to correct deficiencies.
   (d) The submitter of a disapproved CSM may resubmit the CSM with amendments for further review, either to correct deficiencies noted by the approval authority, or to expand the CSM to fully meet the requirements of this part.
   (e) The original copy of the CSM approval letter must be kept with the approved CSM and its amendments, together with supporting documents and calculations used in granting the approval, onboard the vessel for review by
   Resubmission and re-approval by a CSM approval authority are required after any event listed in this section.
   (a) Reconfiguration of a vessel from one type of cargo carriage to another (e.g., a general break-bulk cargo vessel reconfigured to a container or a roll-on/roll-off vessel).
   (b) Reconfiguration or replacement of 15 percent or more of the vessel's fixed cargo securing or tie down systems with different types of devices or systems.
   (c) Replacement of 15 percent or more of the vessel's portable cargo securing devices, with different types of devices for securing the cargo not already used aboard the vessel (e.g., wire lashings replaced with turnbuckles or chains).
   (a) A vessel owner or operator, or person acting on their behalf, who disagrees with a decision of a cargo securing manual approval authority may submit a written appeal to the approval authority requesting reconsideration of information in dispute. Within 30 days of receiving the appeal, the approval authority must provide the vessel owner with a final written ruling on the request, with a copy to the Commandant.
   (b) A vessel owner who is dissatisfied with the approval authority's final written ruling may appeal directly to the Commandant. The appeal must be made in writing and include the documentation and supporting evidence the owner wants to be considered, and may ask the Commandant to stay the effect of the appealed decision while it is under review by the Commandant.
   (c) The Commandant will make a decision on the appeal and send a formal response to the vessel owner and a copy to the approval authority. The Commandant's decision will constitute final agency action on the appeal request.
SUBSEC 97.211-97.299 [Reserved]
   (a) The following organizations are authorized to act on behalf of the U.S. for the review and approval of CSMs:
   (1) The
   (2)
   (3) Any recognized classification society to which the
   (4) The
   (b) Reserved.
   An organization seeking authorization as a CSM approval authority must make a request to the Commandant for authorization. The request must include, in writing, the items listed in this section or as otherwise specified by the Commandant.
   (a) A certified copy of the organization's certificate of incorporation or partnership on file with a U.S. State, including the name and address of the organization, with written statements or documents which show that--
   (1) The organization's owners, managers, and employees are free from influence or control by vessel shipbuilders, owners, operators, lessors, or other related commercial interests as evidenced by past and present business practices;
   (2) The organization has demonstrated, through other related work, the capability to competently evaluate CSMs for completeness and sufficiency according to the requirements of SOLAS and this part;
   (3) The organization has an acceptable degree of financial security, based on recent audits by certified public accountants over the last 5 years; and
   (4) The organization maintains a corporate office in
   (b) A listing of the names of the organization's principal executives, with titles, telephone and telefax numbers.
   (c) A written general description of the organization, covering the ownership, managerial structure, and organization components, including any directly affiliated organizations, and their functions utilized for supporting technical services.
   (d) A written list of technical services the organization offers.
   (e) A written general description of the geographical area the organization serves.
   (f) A written general description of the clients the organization is serving, or intends to serve.
   (g) A written general description of similar work performed by the organization in the past, noting the amount and extent of such work performed within the previous 3 years.
   (h) A written listing of the names of full-time professional staff employed by the organization and available for technical review and approval of CSMs including:
   (1) Naval architects and naval engineers, with copies of their professional credentials, college degrees, and specialized training certificates.
   (2) Merchant mariners with
   (3) Written proof of staff competence to perform CSM review and approval, evidenced by detailed summaries of each individual's experience (measured in months) during the past 5 years of evaluating maritime cargo securing systems. Experience summaries must be documented on company letterhead and endorsed by a company executive who has had direct observation of the individual and quality of his or her work product.
   (j) A complete description of the organization's internal quality control processes including written standards used by the organization to ensure consistency in CSM review and approval procedures by qualified professionals.
   (k) A description of the organization's training program for assuring continued competency of professional employees performing CSM review and approval who are identified in the application.
   (l) Evidence of financial stability over the past 5-year period, such as financial reports completed independently by certified public accountants.
   (m) A list of five or more business references, including names, addresses, and telephone numbers of principal executives, who can attest to the organization's competence within the past 2 years.
   (n) A statement to the
   (o) Any additional information the organization deems to be pertinent.
   (a) The Commandant will evaluate the organization's request for authorization and supporting written materials, looking for evidence of--
   (1) The organization's clear assignment of management duties;
   (2) Ethical standards for managers and cargo securing manual (CSM) reviewers;
   (3) Procedures for personnel training, qualification, certification, and re-qualification that are consistent with recognized industry standards;
   (4) Acceptable standards available for the organization's internal auditing and management review;
   (5) Recordkeeping standards for CSM review and approval;
   (6) Methods used to review and certify CSMs;
   (7) Experience and knowledge demonstrating competency to evaluate CSMs for completeness and sufficiency according to the requirements of SOLAS;
   (8) Methods for handling appeals; and
   (9) Overall procedures consistent with IMO Resolution A.739(18), "Guidelines for the Authorization of Organizations Acting on Behalf of the Administration" (incorporated by reference, see
   (b) After a favorable evaluation of the organization's request, the Commandant may arrange to visit the organization's corporate and port offices for an on-site evaluation of operations.
   (c) When a request is approved, the organization and the
   Approved organizations will enter into a written agreement with the
   (a) The period the authorization is valid;
   (b) Which duties and responsibilities the organization may perform and what approval letters it may issue on behalf of the U.S.;
   (c) Reports and information the organization must send to the Commandant;
   (d) Actions the organization must take to renew the agreement when it expires; and
   (e) Actions the organization must take if the Commandant revokes authorization pursuant to 33 CFR 97.320.
   The Commandant may revoke a cargo securing manual (CSM) approval authority's authorization and remove it from the list of CSM approval authorities if it fails to maintain acceptable standards. For the purposes of 46 CFR subpart 1.03, such a revocation would be treated as involving the recognition of a classification society and could be appealed pursuant to 46 CFR 1.03-15(h)(4). Upon revocation, the former approval authority must send written notice to each vessel owner whose CSM it approved. The notice must include the current list of CSM approval authorities and state:
   (a) That its authorization as a CSM approval authority has been revoked;
   (b) The
   (c) That the vessel's CSM remains valid as long as amendments have not been completed which require it to be re-approved pursuant to 33 CFR 97.200 or 97.205.
Subpart B--[Reserved]
PART 160--PORTS AND WATERWAYS SAFETY--GENERAL
   2. The authority citation for part 160 continues to read as follows:
   Authority: 33 U.S.C. 1223, 1231; 46
   3. Revise
   (a) Whenever there is a hazardous condition either onboard a vessel or caused by a vessel or its operation, the owner, agent, master, operator, or person in charge must immediately notify the nearest Coast Guard Sector Office or Group Office, and in addition submit any report required by 46 CFR 4.05-10.
   (b) When the hazardous condition involves cargo loss or jettisoning as described in 33 CFR 97.115, the notification required by paragraph (a) of this section must include--
   (1) What was lost, including a description of cargo, substances involved, and types of packages;
   (2) How many were lost, including the number of packages and quantity of substances they represent;
   (3) When the incident occurred, including the time of the incident or period of time over which the incident occurred;
   (4) Where the incident occurred, including the exact or estimated location of the incident, the route the ship was taking, and the weather (wind and sea) conditions at the time or approximate time of the incident; and
   (5) How the incident occurred, including the circumstances of the incident, the type of securing equipment that was used, and any other material failures that may have contributed to the incident.
TITLE 46--SHIPPING
PART 97--OPERATIONS
   4. The authority citation for part 97 continues to read as follows:
   Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3306, 6101; 49 U.S.C. 5103, 5106; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 54757; 3 CFR, 1991 Comp., p. 351;
   5. Add
   Each U.S.-flagged vessel that must comply with Chapter VI/5.6 or Chapter VII/5 of the
   Dated:
Director of Commercial Regulations and Standards,
[FR Doc. 2013-26886 Filed 11-14-13;
BILLING CODE 9110-04-P
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