Manning of MODUs NOSAC

18 April 2013

Alan Spackman Vice President, Offshore Division

Slide no. 2 IADC

Manning of MODUs

What establishes MODU manning? What is the present regulatory landscape? What is the regulatory history? ─ Coastal State vs. flag State ─ Person in charge

Some personal observations

Slide no. 3 IADC

What establishes MODU manning?

Commercial needs ─ Needs of the rig owner, including those

agreed to in collective bargaining agreements

─ Additional demands of the client Statutory/Regulatory requirements ─ Flag State ─ Coastal State

Slide no. 4 IADC

Flag State requirements

Treaty obligations, in accordance with national implementing legislation

─ UNCLOS, Article 86, 97, paragraph3(b) and Article 217, paragraph 2

─ SOLAS, regulation V/14

─ MLC 2006, Title 2, Regulation 2.7

Additional national legislation and regulation

Slide no. 5 IADC

Coastal State requirements

Treaty obligations, in accordance with national implementing legislation ─ SOLAS, regulation I/19 ─ MLC 2006, Article 7 & Title 2,

Regulation 2.7 Additional national legislation ─ UNCLOS, Articles 77, 80 and 81, or ─ Convention on the Continental Shelf,

Article 2 (United States)

Slide no. 6 IADC

UNCLOS Part VII, High Seas, Section 1, General Provisions

Article 86 – Application The provisions of this Part apply to all parts of the sea that are not included in the exclusive economic zone, in the territorial sea or in the internal waters of a State, or in the archipelagic waters of an archipelagic State.

Article 94/3(b) – Duties of the flag State Every State shall take such measures for ships flying its flag as are necessary to ensure safety at sea with regard, inter alia, to … (b) the manning of ships, labour conditions and the training of crews, taking into account the applicable international instruments …

Slide no. 7 IADC

UNCLOS Part XII, Protection and preservation of the marine environment, Section 6, Enforcement

Article 217 – Enforcement by States 1. States shall ensure compliance by vessels flying their flag or of their registry with applicable international rules and standards, . . . and with their laws and regulations adopted in accordance with this Convention for the prevention, reduction and control of pollution of the marine environment from vessels and shall accordingly adopt laws and regulations and take other measures necessary for their implementation. Flag States shall provide for the effective enforcement of such rules, standards, laws and regulations, irrespective of where a violation occurs.

2. States shall . . . take appropriate measures in order to ensure that vessels flying their flag or of their registry are prohibited from sailing, until they can proceed to sea in compliance with the requirements . . . referred to in paragraph 1, including requirements in respect of design, construction, equipment and manning of vessels.

Slide no. 8 IADC

UNCLOS Part VI, Continental Shelf

Article 77/1 – Application The coastal State exercises over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources.

Article 80 – Artificial islands, installations and structures on the continental shelf

Article 60 applies mutatis mutandis to artificial islands, installations and structures on the continental shelf.

Article 81 – Drilling on the continental shelf The coastal State shall have the exclusive right to authorize and regulate drilling on the continental shelf for all purposes

Slide no. 9 IADC

UNCLOS Part V, Exclusive Economic Zone

Article 60 – Artificial islands, installations and structures in the exclusive economic zone 1. In the exclusive economic zone, the coastal State shall have the exclusive right to construct and to authorize and regulate the construction, operation and use of: (a) artificial islands; (b) installations and structures for the purposes provided for in article 56 {economic exploitation of the resources within the zone, including the sea-bed and its subsoil} and other economic purposes; (c) installations and structures which may interfere with the exercise of the rights of the coastal State in the zone.

Slide no. 10 IADC

SOLAS Chapter V, Safety of navigation Regulation 1 – Application Unless expressly provided otherwise, this chapter shall apply to all ships on all voyages, except: {warships and Great Lakes}.

Regulation 14 – Ships’ manning 1. Contracting Governments undertake, each for its national ships, to maintain, or, if it is necessary, to adopt, measures for the purpose of ensuring that, from the point of view of safety of life at sea, all ships shall be sufficiently and efficiently manned. 2. For every ship to which chapter I applies, the Administration shall: .1 establish appropriate minimum safe manning following a transparent procedure, taking into account the relevant guidance adopted by the Organization*; and .2 issue an appropriate minimum safe manning document or equivalent as evidence of the minimum safe manning considered necessary to comply with the provisions of paragraph 1. * Refer to the Principles of minimum safe manning, adopted by the Organization by resolution A.1047(27).

Slide no. 11 IADC

MLC 2006, Title 2, Regulation 2.7* Regulation 2.7 – Manning levels

Purpose: To ensure that seafarers work on board ships with sufficient personnel for the safe, efficient and secure operation of the ship

1. Each Member shall require that all ships that fly its flag have a sufficient number of seafarers employed on board to ensure that ships are operated safely, efficiently and with due regard to security under all conditions, taking into account concerns about seafarer fatigue and the particular nature and conditions of the voyage.

* IADC is not aware of any flag State attempting to fully apply the provisions of MLC 2006 to MODUs, and does not believe that such action would be appropriate.

Slide no. 12 IADC

MLC 2006, Title 2, Regulation 2.7 Standard A2.7 – Manning levels

1. Each Member shall require that all ships that fly its flag have a sufficient number of seafarers on board to ensure that ships are operated safely, efficiently and with due regard to security. Every ship shall be manned by a crew that is adequate, in terms of size and qualifications, to ensure the safety and security of the ship and its personnel, under all operating conditions, in accordance with the minimum safe manning document or an equivalent issued by the competent authority, and to comply with the standards of this Convention.

2. When determining, approving or revising manning levels, the competent authority shall take into account the need to avoid or minimize excessive hours of work to ensure sufficient rest and to limit fatigue, as well as the principles in applicable international instruments, especially those of the International Maritime Organization, on manning levels.

Slide no. 13 IADC

Regulatory History 1953 Outer Continental Shelf Lands Act, 1953, gives USCG the

authority to promulgate and enforce regulations pertaining to safety equipment, and other matters relating to the promotion of safety of life and property on the islands and structures on the OCS.

OCSLA (1953) authority did not extend to vessels. Accordingly, MODUs remain subject to USCG inspection and certification (and manning), under the applicable provisions pertaining to: • Mechanically-propelled vessels >15 GT carrying freight or

passengers for hire; • Seagoing motor vessels ≥300 GT; and • Seagoing barges ≥100 GT.

Slide no. 14 IADC

Regulatory History 1953 Coast Guard adopts policy of encouraging effective self- to regulation of islands and structures on the OCS. 1972

At some point, Coast Guard recognizes that penalties for MODUs failing to hold a Certificate of Inspection only apply when “navigated without such certificate.” “Dual Status” theory conceived by Coast Guard to allow for regulation of MODUs under 1953 OCSLA while “on location” and under vessel inspection statutes while “navigating.”

Slide no. 15 IADC

Regulatory History 1953 Casualties begin to convince policy makers that a more to effective regulatory regime is needed. These include: 1972

• 1957 - capsize of drilling barge MR. K in GoM, with 9 dead; • 1957 - collapse and sinking of j/u DEEPWATER II in hurricane

in GoM; • 1959 - collapse of j/u TRANSGULF RIG 10, in GoM; • 1963 - collapse of j/u MR LOUIE, on German CS; • 1964 - sinking of drilling barge C.P. BAKER in GoM after

blowout, with 22 dead; • 1965 - collapse of j/u ZAPATA MAVERICK I, in GoM; • 1968 - collapse and sinking of j/u OCEAN PRINCE on UKCS; • 1968 - sinking of j/u DIXILYN JULIE ANN, under tow in GoM; • 1969 - sinking of j/u CONSTELLATION, under tow, in the

North Sea; • 1969 - sinking of j/u ZAPATA SCORPION, under tow, in the

Atlantic Ocean.

Slide no. 16 IADC

Regulatory History 1967 USCG proposes regulations for “industrial vessels,” which

include “drill rigs” for 46 CFR Subchapter I.

1968 “Industrial Vessel” regulations finalized.

1972 USCG begins development of regulations for bottom bearing MODUs and work-over units under 46 CFR Subchapter I. Rulemaking withdrawn after concluding Subchapter I was not appropriate.

1973 USCG establishes pilot program at Marine Inspection Office New Orleans for licensing of persons on industrial vessels.

1975 The Inter-Governmental Maritime Consultative Organization (IMCO, now IMO) begins development of the Code for the Construction and Equipment of Mobile Offshore Drilling Units.

Slide no. 17 IADC

Regulatory History 1973 Additional casualties spur international activity and continue to to influence both U.S. legislation and regulations; Including: 1983

• 1975 - capsize and sinking of j/u AMDP-1, under tow in the Persian Gulf;

• 1976 - capsize and sinking of j/u OCEAN EXPRESS, under tow off West Africa;

• 1976 - capsize and sinking of j/u OCEAN MASTER II, under tow in the GoM, with 13 dead;

• 1979 - capsize and sinking of j/u BOHAI 2, under tow in Gulf of Bohai, with 72 dead;

• 1980 - collapse and sinking of s/s ALEXANDER L. KEILLAND on Nowegian CS, with 123 dead;

• 1982 - sinking of s/s OCEAN RANGER on Canadian CS, with 84 dead;

• 1983 - sinking of drillship GLOMAR JAVA SEA during in South China Sea with 81 dead.

Slide no. 18 IADC

Regulatory History 1977 46 CFR Subchapter I-A (Mobile Offshore Drilling Units)

proposed.

1978 46 CFR Subchapter I-A promulgated under the authorities applicable to commercial vessels (i.e., freight/passenger vessels >15 GT, seagoing motor vessels ≥300 GT or seagoing barges ≥ 100 GT) to require inspection and certification of MODUs. (These continue to be limited by consideration of the need for a COI only for navigation.)

1978 OCSLA amendments of 1978 provide broadened authority for regulation of OCS safety to the Secretary of the Department of Interior and the Secretary of the Department in which the Coast Guard is operating. USCG is provided with expanded authority for regulation of workplace safety on the OCS. MOU between the USCG and the U.S. Geological Survey (now the Bureau of Safety and Environmental Enforcement (BSEE)) addresses overlapping responsibilities.

Slide no. 19 IADC

Regulatory History 1978 USCG contracts services of research firm to conduct a survey

and an analysis of the industrial/maritime MODUs personnel training and qualification requirements with view to development of regulatory proposal for MODU qualifications.

1979 IMCO adopts the Code for the Construction and Equipment of Mobile Offshore Drilling Units, 1979 (resolution A.414(XI))

1979 U.S. Coast Guard Chief Counsel: (1) confirms that a MODU when not in navigation is not

required to maintain a Certificate of Inspection and penalties could be applied only for navigation without such a certificate; but

(2) affirms that ample authority to require persons on board a MODU and to inspect a MODU when not in navigation is contained in the Outer Continental Shelf Lands Act, as amended in 1978.

(3) concludes that because of expanded authority under OCSLA, “Dual Status” theory no longer important.

Slide no. 20 IADC

Regulatory History 1980 In testimony before the House, ADM Bell reports that 58 of

129 US flag MODUs have been inspected and certificated. 20 foreign flag MODUs yet to be inspected.

1980 USCG publishes a notice of proposed rulemaking to implement OCSLA amendments of 1978 to address “OCS Activities” rather than “Artificial Islands” (33 CFR Subchapter N)

1980 USCG informs NTSB of its intent to establish manning standards for MODUs “not in navigation” under the authority of OCSLA.

1981 IMCO begins development of qualifications for personnel on Mobile Offshore Units based on IADC recommendations.

Slide no. 21 IADC

Regulatory History 1981 Marine Board of the National Research Council issues report

“Safety and Offshore Oil.” Among the many recommendations: (1) Clear designation of the person who has command and

control of the unit during all operational phases and identification of when command responsibility shifts from one phase to the next;

(2) Certification or licensing of persons, through examination, to establish their competence to serve in MODU command positions during specific operational phases.

1982 Final rule for 33 CFR Subchapter N issued. In response to

concerns regarding employee qualifications, it is specifically noted that “This rule does not require certification of employee qualifications.” Establishes requirement for designation of “person in charge” but does not define authority and assigns few responsibilities.

Slide no. 22 IADC

Regulatory History 1983 Pub. L. 98-89 recodifies much of Title 46 U.S. Code. Among

other things, it: (1) Makes “Mobile Offshore Drilling Unit” a distinct class of vessel subject to inspection; (2) Amends language regarding compliance with the Certificate of Inspection to remove any implication that compliance is required only during navigation; (3) Makes substantial changes to the provisions regarding manning and licensing and certification of seamen; and (4) Requires that a manning requirement “imposed on … a mobile offshore drilling unit shall consider the specialized nature of the unit.”

1983 IMO adopts resolution A.538(13), Maritime Safety Training of Personnel on Mobile Offshore Units.

1983 USCG publishes NPRM to completely revise its licensing and manning regulations. These included provisions on MODU personnel and manning.

Slide no. 23 IADC

Regulatory History 1985 USCG publishes a separate Supplemental Notice of Proposed

Rulemaking (SNPRM) concerning the licensing of MODU officers and manning of MODUs.

1985 USCG begins “second phase” of OCS activities regulations with publication of ANPRM to revise 33 CFR Subchapter N.

1985 IADC provides USCG with detailed MODU On-Board Marine Task Analysis report to support SNPRM.

1987 USCG publishes Interim Final Rule on licensing of MODU officers and manning of MODUs, but receives comments regarding additional needed changes regarding OIM qualifications and manning levels.

1988 USCG publishes Final Rule withdrawing from inspection of fixed facilities.

1989 USCG suspends 1987 Interim Final Rule on MODU licensing and issues a second IFR.

Slide no. 24 IADC

Regulatory History 1989 IMO adopts the Code for the Construction and Equipment of

Mobile Offshore Drilling Units, 1989 (resolution A.649(16)). 1990 USCG publishes a second Interim Final Rule on MODU

licensing. 1991 IMO adopts resolution A.712(17) on Recommended

standards of specialized training, qualifications and certification of key personnel assigned responsibility for essential marine functions on Mobile Offshore Units (MOUs).

1995 IMO adopts resolution A.828(19) on Recommendations on maritime safety and emergency preparedness training for all personnel working on MOUs.

1995 USCG publishes “Request for Comments” to begin “final phase” of revision of 33 CFR Subchapter N.

1999 IMO adopts resolution A.890(21) on Principles of safe manning.

Slide no. 25 IADC

Regulatory History 1999 IMO adopts resolution A.891(21) on Recommendations on

training of personnel on Mobile Offshore Units (MOUs), revoking resolutions A.538(13), A.712(17) and A.828(19).

1999 USCG issues NPRM to substantially rewrite 33 CFR Subchapter N.

1999 MMS assigns responsibilities in 30 CFR part 250 to the ‘person in charge’ with respect to welding

2001 Commander, Eighth Coast Guard District issues Policy Ltr 08-2001, Licensing requirements for personnel on non-self propelled floating Outer Continental Shelf (OCS) facilities. This policy establishes manning and licensing requirements for certain OCS facilities solely under the authority of OCSLA.

2009 IMO adopts the Code for the Construction and Equipment of Mobile Offshore Drilling Units, 2009 (resolution A.1023(26))

2010 BOEMRE SEMS rule assigns additional responsibilities to the “person in charge.”

Slide no. 26 IADC

Regulatory History 2011 BOEMRE SEMS II NPRM proposes defining “person in charge”

as “ultimate work authority” and requires the UWA to be designated by the lease operator.

2011 IMO adopts resolution A.1047(27) updating the Principles of Safe Manning, revoking resolution A.890(21).

2013 IADC co-sponsors submission to IMO to update resolution A.891(21) on Recommendations on training of personnel on Mobile Offshore Units (MOUs).

Slide no. 27 IADC

Some personal observations

MODU fleet has changed dramatically since existing regulatory scheme developed ─ Proportion of U.S.-flag units ─ Complexity of units has increased ─ “Marine” tasks vs. those essential for safety

Significant changes in regulatory landscape since 1983 ─ IMO MODU Code, Principles of safe manning,

Training of MOU personnel, etc. ─ Diminished USCG resources ─ Increased BSEE interest

Slide no. 28 IADC

Some personal observations

USCG has authority to specify manning for OCS units (vessels and facilities) under OCSLA. ─ Authority and responsibility of person in

charge remain poorly defined.

─ Manning: If done under authority of OCSLA, what about other OCS units?

Slide no. 29 Maersk Drilling

Additional supporting slides follow Not part of presentation

Slide no. 30 IADC

CASUALTIES and MANNING 17 APR 1957 Drilling Barge MR. K. capsizes in GoM with

loss of 9 lives.

02 OCT 1957 Marine Board recommends all mobile platforms located beyond the headlands be made subject to regulations for mobile platforms on the OCS.

22 MAY 1958 Commandant does not accept recommendation; Cites favorable experience with self-regulation and the “Manual of Safe Operating Practices for Offshore Mobile Drilling Platforms” developed by the Panel of Advisors to 8th Coast Guard District.

Slide no. 31 IADC

CASUALTIES and MANNING 15 OCT 1958 Fire on platform 45-E, West Delta, with one

dead and six missing.

04 DEC 1958 Marine Board recommends changes to regulations regarding: (1) Control hot work; (2) require participation in emergency drills; (3) signage; (4) designation and responsibilities for “person in charge”. Also recommends legislative change to authorize civil penalties.

13 APR 1959 Commandant refers (1), (2) to Merchant Marine Council for consideration. Concludes OCMI has authority for (3). Also notes (4) is matter already pending before the Council and expresses doubt that civil penalties would improve regulatory compliance.

Slide no. 32 IADC

CASUALTIES and MANNING 30 JUN 1964 Sinking of Drilling Barge C.P. BAKER following

blowout.

14 SEP 1964 Marine Board recommends Offshore Oil Panel consider: (1) Station bills; (2) indoctrination and emergency drills; (3) manned control center; (4) designation of the line of command for POB.

23 APR 1965 Commandant agrees and refers recommendations to the Offshore Oil Panel of the Merchant Marine Council.

Slide no. 33 IADC

CASUALTIES and MANNING 16 APR 1976 Capsizing and sinking of jackup OCEAN

EXPRESS while under tow, with 13 dead.

12 MAY 1977 The Marine Board recommended: (1) expediting regulations for inspection of MODUs; (2) licensing of Toolpushers; (3) licensing of Barge Movers; (4) regulations for emergency drills and training; (5) deliniation of owner responsibility for safety indoctrination of POB.

1 JUN 1978 The Commandant: (1) noted proposed regulations for MODU licensing was being developed; (2) a survey and analysis of industrial/maritime personnel and training requirement for MODUs was underway in advance of rulemaking.

Slide no. 34 IADC

CASUALTIES and MANNING 10 MAY 1979 Collapse and sinking of Jackup RANGER I with

7 dead and 1 missing.

12 JUN 1980 Marine Board recommends Offshore Oil Panel consider: (1) Station bills; (2) indoctrination and emergency drills; (3) manned control center; (4) designation of the line of command for POB.

13 MAY 1981 Commandant agrees and refers recommendations to the Offshore Oil Panel of the Merchant Marine Council.

Slide no. 35 IADC

CASUALTIES and MANNING 15 FEB 1982 Capsizing and sinking of OCEAN RANGER with

84 dead.

20 MAY 1983 Marine Board recommends : (1) Regulations to assure MODU person in charge has prerequisite professional knowledge; (2) 46 CFR 109 be amended to provide for only a “Person in Charge” in lieu of a “Master or Person in Charge;” (3) Owners certify assigned Masters have MODU specific training; (4) Industrial Master’s License criteria be upgraded to that of Unlimited Master; (5) Regulatory program for ballast control, jackup control, and vessel positioning control; (6) Owner certification of training for ballast control, jackup control, and vessel positioning control.

Slide no. 36 IADC

CASUALTIES and MANNING 21 OCT 1983 Commandant: (1) noted that licensing

qualifications for MODU masters are addressed in 9 August 1983 rulemaking proposal; (2) a planned revision to 46 CFR 107 will require that the master of MOUs be the person in charge; (3) proposed changes to 46 CFR part 10 will require vessel-specific familiarization; (4) the Industrial Master license should NOT entail the same skills of an Unlimited Master’s license, but that upgraded skills would be proposed; (5) Manning requirements on MOUs may be changes to include two mates while on station with the expectation that they will oversee ballast control, jackup control, and vessel positioning control; (6) Did not concur with Boards recommendation (6) above.

Slide no. 37 IADC

CASUALTIES and MANNING 25 OCT 1983 Capsizing and sinking of drillship GLOMAR

JAVA SEA with 81 dead.

28 MAY 1985 Marine Board recommended: (1) Reexamination of manning scales for moored drillships to assure qualified personnel to get underway in an emergency; (2) Examination of practice of counting credentialed persons employed in non-marine positions toward required complement; (3) Formal training standard for lifeboatmen; (4) Examination of command structure to ensure one individual is identified with absolute authority; (5) 46 CFR 109.107 be revised to require that the licensed Master required by the COI be the designated “person in charge.”

Slide no. 38 IADC

CASUALTIES and MANNING 05 MAR 1986 Commandant: (1) published NPRM (24 Oct 1985)

with manning scales for drillships; (2) noted that the assignment of marine crew is left to the discretion of the master; (3) upgrading of the regulatory requirement for training of lifeboatmen was already underway (31 Dec 1984 ANPRM); (4) Agreed that a clear chain of command and clear designation of authority are essential and the master must have full unequivocal authority regarding safety matters and evacuation at all times; (5) An ANPRM to amend 46 CFR 109.107 was issued on 25 March 1985 which, if adopted, “will identify the single individual who has the sole responsibility for marine safety and evacuation of personnel on all MODUs.

Slide no. 39 IADC

CASUALTIES and MANNING 15 DEC 1988 Capsizing and sinking of Jackup ROWAN

GORILLA I.

29 MAR 1990 Marine Board recommended: (1) limiting POB during ocean tows to essential personnel; (1) Station bills; (2) establishing regulations under OCSLA to require formal personal survival training.

18 MAY 1992 Commandant: (1) agreed regarding limiting POB and asked industry to develop guidance; (2) declined to address formal personal survival training under OSCLA, citing adequacy of vessel requirements in 46 CFR parts 10 and 109.