1. Lloyd’s Register Canada Ltd. DELEGATION – is it working? Bud Streeter President Lloyd’s Register Canada Ltd. Presented by: Marcel LaRoche Marine Manager Western Canada Lloyd’s Register Canada Ltd. May 25 th, 2013

2. Lloyd’s Register Canada Ltd. Delegated Statutory Inspection Program (DSIP) Where have we been? Where are we? Is it Working? Where to? Conclusions What I’ll cover

3. Lloyd’s Register Canada Ltd. What is the Delegated Statutory Inspection Program (DSIP)? Tool for Flag State Inspections Delegation of statutory inspection function to recognized organizations (RO) Five Classification Societies (at this time) Can be to any organization or individual

4. Lloyd’s Register Canada Ltd. Implementation of standards for: Strength Propelling machinery Electrical systems Control systems Anchoring equipment Strength Fire & lifesaving Communications Damage stability Propelling machinery, electrical & control systems Strength Freeboard Intact stability Damage stability Accidental Operational IMO Conventions Safety (SOLAS) Floatability (Loadline) Pollution (MARPOL) Damage stability Statutory certification Classification Regulatory Relationships

5. Lloyd’s Register Canada Ltd. Where have we been? Load Lines were delegated in the late 1960s Policy to delegate in early 1980s Partial for classed tugs and lakers Renewed policy in 1994 and 1996 First agreement – Dec. 4, 2000 ISM in 2000 as well

6. Lloyd’s Register Canada Ltd. Where have we been? First enrolment – March 14, 2001 –laker Canadian Enterprise First tug enrolled – Dec. 11, 2001 – Placentia Pride First new construction tug project in early 2005 Now a major push to complete delegating all ships in class. Alternative Service Delivery being discussed for all existing ships over 24m Mandatory class and delegation for new ships over 24m

7. Lloyd’s Register Canada Ltd. Where are we? When Bud spoke at Towboat 2007, there were 91 classed vessels in the program Today, of 365 listed classed vessels, 326 are delegated or waiting for handover surveys. 1/3 of those are in the Atlantic Canada Region of TC with the remainder evenly spread over the other 4 regions.

8. Lloyd’s Register Canada Ltd. Where are we? (Cont.) Inspection Type20122011 Enrolment – Canadian 4290 Enrolment - Foreign 412 Enrolment - Newbuild 39 Monitoring - Drydock 42 Monitoring - Followup 1214 Monitoring - Inquiry / Incidents 139 Monitoring - Operations 5022 Monitoring - Priority 49 Monitoring - Project / Plans 516 Monitoring - Seasonal Reflag 03 Non-delegated Statutory 5879 Grand Total 195265 Table 1: Number of DSIP Inspections by Year

9. Lloyd’s Register Canada Ltd. Inspection Type20122011 Enrolment - Canadian369335 Enrolment - Foreign2231 Enrolment - Newbuild175 Monitoring - Drydock00 Monitoring - Followup64 Monitoring - Inquiry / Incidents1645 Monitoring - Operations9093 Monitoring - Priority6090 Monitoring - Project / Plans3044 Monitoring - Seasonal Reflag04 Non-delegated Statutory2330 Grand Total617751 Table 2: Number of Deficiencies by Year Is it working?

10. Lloyd’s Register Canada Ltd. Is it working? Well, sorta yes! If you don’t look too hard!

11. Lloyd’s Register Canada Ltd. Is it working? Top Deficiency Groupings 2012 - # of deficiencies 2011 - # of deficiencies SAFETY232255 HULL9891 DOCUMENTS93140 MACHINERY83137 ACCOMMODATION 4634 NAVIGATION44 POLLUTION1634 CARGO516 Table 3: Most Common Deficiency Groupings

12. Lloyd’s Register Canada Ltd. So where to? At the last CMAC, TC presented Alternative Service Delivery (ASD) for the Certification of Vessels of 24m and Above. Such vessels will obtain certificates from RO’s Presently 5 RO’s in Canada (ABS, BV, DNV, GL and LR) There are 4 outstanding formal applications for recognition. New vessels will be built to class and entered in DSIP Imported vessels will be classed and entered in DSIP BUT…….What about existing vessels????

13. Lloyd’s Register Canada Ltd. So Where to? There are estimated to be 470 vessels of this category which are not “classed” with any of the ROs. 177 of those are in the Pacific and Prairie and Northern Regions of Transport Canada. 148 are categorised as Tugs/Workboats and Barges. Volume and workload could be a challenge.

14. Lloyd’s Register Canada Ltd. So where to? But the biggest “challenge” is…. 333 are older than 30 years!!

15. Lloyd’s Register Canada Ltd. Owner contracts shipyard to build ship to meet regulations: - Classification Rules; - IMO International Conventions - Administrations Special Requirements Shipyard or owner provides design to Class for approval Class surveyors inspect, test and approve materials, components, hull, machinery and statutory items Ship delivered to owner with classification and statutory certification in place. Ship is subjected to periodic surveys during ships life to maintain classification and statutory certification. Ship reaches end of life and is recycled. The Lifecycle Process

16. Lloyd’s Register Canada Ltd. The Role of Classification Societies Assurance At delivery certification assures that: The ship has been designed to a prescribed standard that reflects the operational requirement The ship has been constructed to those standards, using traceable materials and components Establishes records for in service phase

17. Lloyd’s Register Canada Ltd. So where to? TC recognize that some ships may not be able to enter into class at all. TC have indicated that existing ships “will not be expected to enter into class if would cause undue hardship to the vessel owner”.

18. Lloyd’s Register Canada Ltd. So Where to? Certification options to explore…. TC continue to issue certificates following their inspections TC issue certificates based on Statements of Compliance issued by their ROs. “latent defect “provisions agreed between TC and ROs.

19. Lloyd’s Register Canada Ltd. Conclusions Delegation is working as a strengthening partnership between owner, seafarers, RO and TCMS. Delegation can improve through more owner- friendly, yet robust, Acceptance into Class (AIC) processes. Owners and operators must continue to monitor and improve their compliance performance. ROs must continue to refine and improve their survey performance TCMS must continue to improve and refine their monitoring processes.

20. Lloyd’s Register Canada Ltd. Thank You! And apologies from Bud for missing an important event.

21. Lloyd’s Register Canada Ltd. For more information, please contact: Marcel LaRocheBud Streeter Marine Manager West Coast AreaPresident Lloyd’s Register Canada Ltd. 221 West Esplanade45 Alderney Drive Suite 512Suite 812 North Vancouver BCDartmouth, NS +1 (604) 982-2120+1 (902) 425-5101 ext 231 marcel.laroche@lr.orgbud.streeter@lr.org www.lr.org/marine