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News Article 17/10/2006

TMSA discussed at length (Tanker Operator, September 2006, p.26-31)

"When we first read TMSA, we thought, this is crazy," said John West, operations manager of Unicorn Shipmanagement in Cyprus."But by the third day we realised, this is quite a good document."
Like Unicorn, much of the shipping industry initially gave TMSA, the oil companies'' guide, a cool welcome.
They are also gradually beginning to understand the dynamism of TMSA, almost a market conversation and framework for improvement across the whole business, rather than a one-off list of rules to be complied with.
But many are starting to see how it can help tanker operators get rewarded for their competence and compete on their competence, something that has arguably not been happening in the past.
It is gradually becoming clear in many sectors of the shipping industry just how big a modernisation force TMSA might be in the shipping industry.
Remember how over hyped ISPS was, with so many industry conferences, talk about how the shipping industry would have its vessels detained, so many vendors and security consultants getting excited, and when the deadline passed, it was a complete non-event as all the shipping companies had their pieces of paper - and afterwards forgot all about it?
TMSA is the opposite. There is absolutely no hype at all - indeed many tanker operators are saying that since they aren't forced to do it, they won't do it - yet major shipmanagement concerns and shipowners, such as ITM and BW Shipping, are re-organising their entire company structures around it.
Some shipmanagers and owners (including Anglo Eastern), that operate both tankers and dry bulk vessels are also using the system for their dry bulk vessels, rather than have different management systems for different ships in their fleet.
Similarly, many vetting inspectors who inspect both tankers and dry bulk vessels are also seeing it as a useful framework to audit dry bulk vessels against.

Information technology
TMSA is not specifically about information technology - indeed information technology is only mentioned once in the document - but there is a very strong IT angle here.
As shipping companies get more proactive in trying to improve the quality of the operations, the information technology and communications budgets will start to open up; no more we're only spending money on this if we have to.''
Shipping companies will have an incentive to spend money on improved management systems, better ship-shore communication, computer based training tools and simulators, electronic charts and crew communications facilities.
There's more - one of the trickiest systems in TMSA is the one on change management, where tanker operators are asked to have systems in place to make it easier to change.
Information technology, as Wallem's CIO Patrick Slesinger said, is a tool for change management.
As part of their change management systems, shipowners will be encouraged to realise that just because something was a good idea when they were at sea, it doesn't necessarily mean it is a good idea now. Can you hear the IT budgets unzipping?

How far to go
Oil companies are likely to look for a minimum compliance with Stage I and perhaps to Stage 3 for long term time charters or COAs (contracts of affreightment). This does not mean that everybody has to be Stage 3.
Oil majors will take whatever they can legally charter rather than let people's cars run out of fuel. "Recently I had heard one oil major who had conducted a few audits saying that he has rarely come across any company which has crossed stage I in most elements," said Capt R. Janardhanan, QHSE manager, Anglo Eastern Singapore.
"Charterers seeking a level 4 ship are likely to have to pay a high premium for it," said KK Kumar from NYK Shipmanagement. "Only a small proportion of the fleet will reach level 4. To reach this is very difficult and it will take a long time. When you reach it charterers will be very happy to charter your vessel."
KK Kumar's recommendation was that companies should certainly comply with level I, and then subsequently gradually build themselves up the levels like building blocks. "Aim for level 4 in the due course of time," he said.
However, the idea of TMSA level I being equivalent with ISM level is a myth, said Captain Brown of consultants JCP Marine, or if it is true, there are plenty of vessels out there which are not ISM compliant. To provide an indication of the general level of shipping companies he has reviewed, Brown talked about TMSA and management audits that he has carried out over the past two to three years with various Asian shipping companies, including Thailand (two companies), Indonesia (two), Japan (four), Malaysia (two), Philippines (two), South Korea (three) and India (five).

The companies each operated between one and 25 vessels, totalling 32 products tankers, 30 bulk carriers, 20 general cargo ships, 34 chemical/oil tankers, 19 crude oil tankers, two offshore support vessels, one deck cargo ship and two passenger vessel.

While TMSA does not strictly speaking provide any calculation method for developing an exact score, Brown tabulated the results and levels of compliance. The results overall indicated the majority of operators (60%) failed to fully comply with Stage 1: 40% scored between 0 to OA, 20% 0.5 to 0.9 and 40% 1 to lA, he said.
The highest scoring elements were chapter 2, recruitment management of shore based personnel (average 1.3), chapter11, emergency preparedness and contingency planning (1.0) and chapter 5, navigation safety (0.9). The lowest scoring elements were chapters 7, management of change, chapter 8 - incident investigation and analysis, chapter 9 safety management and chapter 10, environment management. The lowest four scoring elements scored about 0.6, that is only 60% of Stage 1 elements were complied with.

Costings
Both ITM and Teekay said that TMSA would have very little additional costs in their companies, since they were doing most of it anyway.
"We've really had most of these best practises in our system in the past. It's not really costing the owner much," said ITM's Kauchhur. "The owners have not seen any increase in their budgets. You need to have your reporting incorporated in your existing systems. We always did have a planned maintenance system."
"The only cost we would emphasise is some amount of training," said Janardhanan. "Owners are well aware of it."
NYK, by contrast, is expecting to spend around $20,000 per vessel, which is mostly spent on training, including onboard training (CBT, videos and roving trainers), plus shore training (seminars, simulators, courses). There is also some additional manpower requirements, and documentation.
The company also developed its own training programs, and has some incentive programmes for staff based around risk assessment and management.
Kumar said he did not think shipmanagers would be able to cover the co~ts of the necessary investment out of their management fees. "There's no way a management fee can pay for this. You have to find it yourself, or from the owners."
West said that Unicom was planning to spend $40,000 per vessel on TMSA. "We will implement TMSA and take standards of recruitment and employment forward," he said.
Brown said he had noted that shipowners do a lot better at TMSA if the pressure to do it comes from within the company, not outside. "In particular it needs management commitment from the highest level," he said.
No-one is expecting the TMSA document to stay static. "I'm sure TMSA will be revised in the not too distant future," said Kauchhur.
"OCIMF does welcome suggestions for improvements," said Brown. "You can submit feedback to the appropriate OCIMF committees."
It will be a while before the industry knows exactly what the reward will be for reaching the upper levels, but the industry should be thinking about it, otherwise it is just another compliance system, said conference chairman Dimitris Lyras

A thorough check
TMSA does hold up a lot of hope for being able to provide oil majors (and indeed, ship operators) with a more realistic view of what happens onboard ship than with the current ISM plus inspection systems.
Brown said that he was not entirely confident in TMSA, and whether it was impossible for a corrupt tanker operator to pull the wool over a vetting inspector's eyes.
"It depends on the operator," he said. "Someone who was just lying will continue to do so. "Are we saying an irresponsible operator will do the same with TMSA?" he was asked. "I would suggest it is a possibility," he replied.
There was sceptism expressed in the conference about whether TMSA would actually lead to reduced inspections. "They say TMSA will lead to reduced inspections. How far it will be true, we have to see," said Janardhanan.

Tricky aspects
The trickiest aspects of TMSA, most speakers agreed, were the change management, risk assessment and incident reporting.
We're finding management of change one of the most difficult elements - we're struggling to get our heads around it," said West. "Oil majors are still trying to get their heads around it."
"Management of change is one element which stands out from the rest of TMSA," said BW Shipping's Captain Vibhas Garg. "You have to ensure changes don't lead to unnecessary risks."
"Management of change is difficult," said Janardhana
By ''change management'', what TMSA actually means to do, it emerges, is kill off the attitude prevalent in shipping companies, we didn't do that when I was at sea. People who take this attitude are not very good at change management.
ITM has implemented change management procedures. For example, if it is moving into a new trade, it will take on people with experience in that trade. "We all need a common understanding of the management of change," said Kauchhur.
"We believe management of change will be the toughest one," echoed Kumar.
Implementation of risk assessment should be done in a structured way so as to have consistency of application across the fleet," said Kauchhur
"We are working on how we are going to make this happen effectively.
There were suggestions that tanker companies should get seafarers more involved in risk assessment and root cause analysis, rather than seeing it as for something for the shore office to do.

Equal across a fleet
For management purposes it is probably easier to maintain all your fleet at the same level, rather than have a ''star vessel'' which gets a higher score but run at a standard you can't keep up with, on your other ships, said Slesinger.
"We're operating mixed fleets -TMSA applies across the whole fleet - you can't have two separate standards," said West. "Best practice has got to be fleet wide."
"If you look at our group - the Singapore office manages tankers and gas carriers. But the decision at the top management is that it has to be implemented across the fleet," said Janardhanan, talking about Anglo Eastern.

Seafarers
Kauchhur said that in his view, the continuous improvement would make it easier to attract and improve management of seafarers.
This view was echoed by John West, who said. "I think TMSA a driving force in better personnel management than has existed in the past
Garg said "I think that seafarers would like to work for a quality operator,"
It is not clear at this stage how much TMSA will help improve manning levels on ships or ensure that seafarers are taking adequate rest
It does encourage shipowners to make a much greater check that seafarers are making adequate rest, and it does include a large amount of work, which will need extra people to do.
However, shipmanagers are still being given vessels to look after on the basis that they can make things work at the minimum manning levels.

Legal issues
Oil companies do not accept any additional legal responsibility for tanker operators, which have implemented all of the best practice guides.
Many sceptical tanker operators see TMSA as a way for oil companies to pass the liability for accidents onto them, as in, we chartered you because you said you were doing certain things''.
If an oil major ever charters a ship, which has a major accident, the oil company is likely to be more worried about its loss of public image than any legal action, and the general public is unlikely to treat an oil company nicely because of how it chartered its ships.
However, most tanker companies would like to be judged on the diligence of their operations after a tanker accident, rather than the fact that the accident happened, because they acknowledge that even good companies have accidents.
Due diligence means doing everything reasonable to reduce the risk of accidents, and doing everything reasonable afterwards, such as making sure it doesn't happen again.
TMSA does provide an excellent framework for due diligence, and being able to demonstrate to authorities that you did due diligence.
"The management has to provide proof that they have investigated and can provide preventative action," said Eagle Shipmanagement's Mustaffa Bakri.
Janardhanan echoed these views. "It does not say anywhere [In TMSA] that you are not supposed to have an incident," he said. "The point is, if you have an incident you have to follow up and show due diligence. A manager has to show that he used all his resources to mitigate the situation".

Many defects?
Conference chairman Dimitris Lyras raised the issue of how honest shipping companies should be about their defects, bringing up a story mentioned at TANKER Operator's Athens conference last February about an old vessel just brought into management, where the company had found 300 items it wanted to fix (essentially a 300 defect list), but none of the defects were serious enough to warrant taking the ship out of service.
"Would you have that list available to an inspector - would it put you in a good light or a poor light?" he asked.
"I think that the simple answer is that it is better to be frank and honest rather than have third parties finding out," said Slesinger. "If I find something you haven''t detected I will believe you are trying to hide it. If you say these are known issues and what we're doing about it - I think that's a far better stance."
"If you tell oil companies you have 300 item deficiency list, they will say very good, give us a call when it's fixed," said Brown. "Don't be too surprised if they ask to inspect your ship again" he added.
"If you take a ship into management with 300 defects the price would have to be very attractive - or you should look into it on your risk assessment," said West.

Non believers
So far industry reaction to TMSA have been divided up into believers and non-believers / wait and see attitude. The TMSA disbelievers think that since they are not forced to do TMSA, they won't necessarily do anything. They want to see how the dust settles before making any move.
They have learnt to play the shipping system, just doing the minimum to pass the rules, and know that any system which shines a spotlight on tanker companies which do a lot more than that will not do them any favours.
The TMSA disbelievers think this is just a way for oil companies to pass liability onto tanker operators, so, after an accident, they can say, we chartered you because you said you could do x, y and z.
The TMSA disbelievers are cynical about industry initiatives to date, such as ISM, ISPS and ISO, seeing them as a bunch of forms to be filled in, or hoops to jump through, rather than having any positive benefit to anyone and they think TMSA is just another one.
The TMSA disbelievers cite the tanker industry's excellent improvement in its accident record over the past few years as evidence that whatever is happening in the tanker industry to reduce risk is working, and no further initiatives are necessary.

Biggest change areas
Slesinger said he thought the biggest areas of TMSA were "culture and change management, not bare face compliance and under duress."
"With continuous improvement things will be continuously changing," he said. "You need an ability to accept change, not say that's how I did it when I was at sea."
People are also looking at TMSA in the wrong way if they see it as a marketing tool, he said, although there are commercial pressures involved because a higher scoring vessel is more likely to get a charter if the customer has a choice.
Slesinger said that he did not believe tanker companies should set themselves a target to reach a certain level, but instead should use it as a framework to gradually improve. "People say - we want a 3 - fundamentally this is wrong," he said.
He stressed the importance of not losing the core data which you use to develop indices about how well things are going, in case you need to change the calculation method. Tanker companies work out where they stand on something like 12 key performance indicators, using several thousands of pieces of base information, which has to be processed.
Many shipping companies have maintenance systems which are very poor and not able to do the things TMSA is asking for, Slesinger said, particularly on the reporting functions, where shipping companies are asked what the percentage of overdue ship maintenance tasks are on their fleet.
"Planned maintenance systems, many set up in 1994-1995, were I missed opportunity, just to tick a box and say ''I've got it", he said. "People purchased the system and realised the implementation cost. It costs $5,000 for a system; it would cost $5,000 to implement data."

ITM's answer
Kauchhur, marine manager / marine safety quality and security, ITM, said that his company sees TMSA as a good sort of best practice.
"People want more transparency," he said. "There''s no such thing as kicking the dust under the carpet anymore."
However ITM believes the document could be clearer in certain aspects. "There are times when we don't understand a few things," he said.
ITM continually assesses how well each vessel complies with the different elements, and has already done three or four TMSA reviews.
"Every time we change a few of no to yes, and maybe a few yes to no. We jump from yes to no anytime if we find it not fully implemented," he said.
"If we try to reach a stage very fast we might drop a lot of things between the tables, which we don't want do to," he said.
There are 12 items out of all TMSA elements 1-4 which the company does not fully comply with, he says, of which three are at level 3, so currently the company considers itself at level 2, he said.
"The biggest problem we feel is implementation," he said. "We feel that people at sea and ashore should also be equipped with management skills, not just technical or operational skills".
The company is involving many of its ship staff when amending procedures.
"We get people soon to be promoted to master / chief engineer offshore for three months, bring them into the office, and get them involved. We have ship staff coming in to assist us in projects," he said.
"We teach them what a c: superintendent does, what operation people do. When they get back on board they perform a lot better.
"If we place a person in a bigger position than his actual responsibility, he will appreciate this responsibility more," he said.

Anglo Eastern's take
Anglo Eastern (AESM) is fully supportive of TMSA and we are committed to the success of the implementation," said Janardhanan.
AESM has 700 shore staff and operates over 190 vessels, including 33 gas, chemical and oil tankers out of Singapore.
It has had two TMSA reviews from oil majors so far. "We did fairly well," he says. "There was no benchmarking and they did not tell us where we are, they just said, ''you're compliant."
"TMSA is a tool for operators to measure and report their own management systems," he said. "They can do critical self evaluation."
Janardhanan cited a few elements of TMSA, which may need some extra looking into.
He said; "Element 3 - need a competent crew capable of working as an effective team. Element 10 -efforts to improve safety and protection of the environment. Element 7 - management of change - a coherent system to manage temporary and permanent change you need to define level of activity required for approval of change, you need a risk assessment to evaluate impact off any change. A change management process is in place throughout the office and fleet to reduce operational risk. When you have a new type coming in to management- you have to do a change management," he said.
People say when you change the master there could be a requirement of a management of change," he said. "You need a risk assessment to evaluate the impact of any change, for example, new people. It's a grey area we are all looking into."
Element 8 - incident investigation - you have to have comprehensive procedures for incident management - the ''no blame'' report. You have to get into the root cause of the incident and take measures so it never occurs again."
Element 9 - identify each risk or hazard that might lead to a preventable accident. You have to identify this hazard and try to minimise operational risk," he continued.
"Environment management. You have to have a plan for systematic identification and assessment of all sources of pollution, and actions are being implemented," Janardhanan said.
He also said that in his view, some of the guidelines are not defined precisely enough.
"For example, element 3B procedures to ensure working hours are in line with STCW guidelines and accurately recorded.
"A possible interpretation would be: develop procedures to ensure hours of rest hours are as required by STCW, recorded by ship staff, verified during ship visits by the superintendent and monitored by the office to confirm compliance," he said.
"What if - for the first part, the master just sends reports saying STCW hours compliant for January 2006? Don''t we still need to believe it?", he asked.
AESM has developed a pocket risk assessment guide which is given to all seafarers, with instructions such as ''Is there a risk of being struck by or against an object?
"We have what is known as the 10 commandments - a pocket size page - given to every seafarer. They can stick their wife's photo on the back. They are questions to ask to see if he has to consult a supervisor before doing ajob," he says.