Marine Risk Assessment - the ISM Code and beyond

R V Pomeroy, MA, CEng, FIMechE, FIMarE

Director, Marine Advisory Services Lloyd s Register of Shipping, London, UK*

SYNOPSIS
The introduction of the ISM Code and other safety initiatives has given greater emphasis to risk assessment based on well established methods that, to date, have found little enthusiasm within the marine industry. In this paper the author places risk assessment within the context of the requirements implicit within the ISM Code, describes a structured approach to risk assessment and discusses the wider implications of the trends in safety assurance that will place more emphasis on the structured assessment of risks. Some comment is made on the progress with the effective implementation of the ISM Code. Attention is drawn to the benefits to the ship operator from using risk assessment methods in managing their business to optimise costs.

INTRODUCTION Recent initiatives have substantially changed the framework within which the safety of merchant shipping is managed, by the introduction of the revisions to STCW and the entry into force of the 1994 amendments to the International Convention for the Safety of Life at Sea, 1974, which introduced a new Chapter IX, the International Safety Management (ISM) Code(1). Furthermore, the High Speed Code has introduced requirements for wider application of safety assessment methods and the concept of Formal Safety Assessment (FSA) has been supported at IMO as a basis for decision making when considering new regulation. The overall message is that safety does not just happen because ships comply with certain prescriptive requirements and crew members hold the necessary certificates. Safety is achieved by well founded management processes that address the risks associated with ship operations and which are proactive. These management processes must be supported by rules and regulations that consider safety in a holistic manner.
6 5 4 3 2 1 0 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Fig 1 Actual loss rate per 1000 ships 1978-1997

Vaughan Pomeroy joined Lloyd s Register in 1980 after gaining a degree in engineering from the University of Cambridge and experience in the aircraft industry and with international consulting engineers. Working initially on research and development, he managed HQ departments responsible for marine machinery and pressure equipment before being appointed Deputy Chief Engineer Surveyor in 1992. As Head of Engineering Services, Marine Division he was responsible for all aspects of marine, mechanical and electro-technical engineering. He is now Director, Marine Advisory Services with responsibility for all matters other than Classification and Statutory Certification.

There has been a significant improvement in the number of ship losses (Fig.1) and it is suggested that the reduction in the loss rate is all the more remarkable when it is considered that over the same period the average age of ships has increased by a factor of 1.6. The marine industry must not become complacent in the light of such statistics and has to recognise that there is room for further improvement. There will be changes in the Rules of Classification Societies and in the requirements imposed by the IMO Conventions that will enhance safety by improving design and construction. However, the culture shift as a consequence of the adoption of safety management by IMO has had, and will continue to have, profound influence on all parts of the marine industry and this fundamental change represents not only a challenge to the shipping community but also the opportunity for gaining further lasting improvements in the safety record. RISK ASSESSMENT AND THE ISM CODE The origins of the ISM Code(1) can be found well over ten years ago when concerns were being expressed about poor management standards and the contribution of human error and management shortcomings on casualties. Through the publication of IMO guidelines on the management of safe operation of ships, the ISM Code was developed. By 1 July 2002 all relevant ships, regardless of their date of construction, will be covered by the ISM Code. Inherent within the ISM Code, and defined in paragraph 1.2 Objectives, is the requirement for the assessment and management of risks. The ISM Code specifically requires that the safety management objectives of the company should, inter alia: provide for safe practices in ship operation and a safe working environment establish safeguards against all identified risks continually improve safety management skills of personnel ashore and aboard ships. The authority responsible for issuing the necessary Documents of Compliance and Safety Management Certificates, when carrying out their audits, looks for objective evidence that these objectives are met by the operators safety management system. Since there is a very clear requirement within the ISM Code for the operator to demonstrate that he has an effective safety management system in operation that addresses all identified risks, and provides proper controls for dealing with these risks, it follows that this can only be achieved satisfactorily if a substantive risk assessment approach is adopted. It has to be emphasised that this should be an effective risk assessment strategy, not necessarily a highly complex quantitative evaluation. The risk assessment approach embraces a large number of techniques, all of which use a formality that makes documentation and rational analysis relatively straightforward. The more complex quantitative methods, some of which are discussed briefly later, have a role to play but a great deal can be achieved from the application of qualitative techniques aimed at the identification of potential hazards, ranking these in terms of relative risk using the opinion of expert practitioners and considering the risk mitigation methods that are available. The ISM Code is clearly intended to provide a framework that will lead to the adoption by all ship operators of effective management methods that will lead to an enhancement of marine safety and pollution prevention. An increased level of safety necessarily means a reduction in the risk levels, requiring a clear assessment of those risks and an analysis of the practical ways that the risks can be managed. Risk assessment and the ISM Code go hand in hand. So, carrying out a risk assessment of shipboard operations, with the active participation of the shipboard staff, would go a long way towards fulfilling the key objectives of the ISM Code. The outcome of the risk assessment would also assist in the development of appropriate procedures for dealing with emergency situations, contributing to the requirements of the ISM Code for emergency preparedness. In the early days of implementation of the ISM Code it became apparent to LR that, despite a high degree of commitment from the operators, there was a need to provide positive assistance with the risk assessment elements, in particular a structured methodology that incorporated a capability to monitor continual improvement. Any methodology, with or without an associated software system, has to be easy to apply, yield credible results and provide obvious assistance without demanding a significant increase in workload for the ship s staff. The advantages had to be easily seen to outweigh the cost. If this could be achieved then an operator could demonstrate his commitment to the objectives of the ISM Code within ease and ensure that the safety management system in use would deliver benefits. Last year LR launched a new product that has been developed from experience gained from working in conjunction with ship operators who have a high level of commitment to safety. It brings forward the best industry practises in terms of risk management, with support for hazard identification for key operations, risk assessment for the hazards identified, recording of risk mitigation measures and monitoring the progress towards lower levels of overall risk. This represents a further step by LR in assisting the marine industry in attaining the levels of safety demanded by society. The outcome of the analysis of the requirement was the development of a scheme called LR Mariner, which is a certification scheme for shipboard safety management systems with a software application as its core. It is a paperless system with all information transfer between the ship and the office by electronic mail or, where necessary, by disk. The office program

includes all shipboard operations and allows the selection of those relevant to a particular vessel. The shipboard program allows the shipboard staff to view the selected operations list and to enter their assessment of the risks involved in each operation, together with the controls. The risk level of each operation is then evaluated. Once the system is installed within the company and the key staff have been trained in its application there follows a development period as the assessment is carried out. Risk factors are determined by the operational staff and a continual improvement process is outlined for agreement with LR. LR undertakes periodic assessments to ensure that the LR Mariner programme is implemented properly, to verify the assumptions used and to agree the risk targets for the next phase up to the next assessment. When this programme is implemented this is noted for each ship in the Register of Ships, giving a visible indication of the operator s commitment to effective implementation of the ISM Code, including the objective of seeking a continuous improvement in risk levels by positive management action on the part of shore based and shipboard staff. The ISM Code also demands that an operator establishes procedures to identify, describe and respond to emergency situations. Emergency preparedness, therefore, requires an assessment of potential risks and determining operational procedures to deal with the various scenarios that have been identified. This includes requirements for exercises and drills, to test the procedures and to train the crews. Furthermore there is a requirement to put in place arrangements that are commensurate with a rapid response to an emergency. LR established its Ship Emergency Response Service to provide expert advice to operators facing a shipboard emergency, by giving naval architectural advice. On acceptance of a vessel into the scheme the ship details are modelled and held ready for rapid analysis when required. The service also provides opportunities for exercises to ensure that the operator s procedures for handling an emergency are tested. This service provides positive assistance to the operator in satisfying the requirements of Clause 8 of the ISM Code. HUMAN FACTORS When conducting any systematic assessment of risk associated with the operation of ships it rapidly becomes apparent that human factors dominate many of the risk scenarios. Casualty data confirms that the general assumptions, and it is often suggested that around eighty percent of casualties result directly from human error. It comes as no surprise to any safety analyst that it simply is not possible to separate technical safety from the influence of operators, in the widest sense. The risk assessment methodology does not allow consideration of a technical solution without due regard being paid to the interactions with people. As an indicator of the impact of human factors on marine incidents the main causes of P&I claims is given in Fig. 2.

Other Equipment failure Structural failure Mechanical failure Shore error Pilot error Crew error Officer error 0 0.05 0.1 0.15 0.2 0.25 0.3

Fig 2 Main causes of P&I claims (2)

This figure clearly indicates the contribution of human error on incidents that resulted in a claim. In some cases it can be shown that the failure of the hardware, the hull structure, machinery or equipment, is also heavily influenced by human factors, including maintenance actions and issues of operability, although this is not immediately apparent from published information. The adoption of assessment techniques that address issues related to human factors and form the basis of establishing appropriate mitigation measures must reduce the overall failure rate. The introduction of the ISM Codes has provided greater opportunity for the classification societies to become closely involved with human factors. In addition to carrying out research into operability issues, LR has taken additional steps by becoming active in promoting the assessment of crew training establishments, required by STCW, in association with the Warsash Maritime Centre of Southampton Institute of Higher Education. The assessment scheme offered by LR and

Warsash is based on the combined expertise of both organisations, bringing in a keen understanding of the demands for effective crew training and the skills of assessment and audit. IMPACT OF FORMAL SAFETY ASSESSMENT The principle that Formal Safety Assessment should be adopted as a systematic and rational process for assessing risks and evaluating the benefits of mitigation options has been accepted by IMO and the interim guidelines were approved in 1997 (3). The concept of FSA provides an elegant route to application of well-established risk analysis methods, already widely used in other industries, within shipping activities, whereas the proposition of moving rapidly towards a safety case regime would be extremely difficult. LR worked closely with the Marine Safety Agency (now the Maritime and Coastguard Agency), under a research contract, during the development of the first three steps of the FSA process that is described in the interim guidelines (3). The discussion during this formative phase was extremely challenging as people with considerable experience of the application of risk assessment methods in other industries developed a format that was suitable for adoption in the regulation-making framework of IMO. The development process involved testing the methodology by examples and the work was reported to an international seminar at IMO in May 1995 (4, 5) In addition to a direct involvement in the FSA methodology, LR has been actively considering the application of safety assessment techniques for many years and has promoted the use of such methods in the marine industries (6, 7). In parallel the experience gained in the preparation of safety cases for offshore installations has provided experience of the application of the key techniques of analysis (8). In some specific trades there is considerable interest in constructing a safety case for a ship but in general this is not the situation. In some cases LR has found that owners are receptive to the application of simulation techniques to model their operation to predict the likely outturn in terms of the probability that certain performance criteria, such as the delivery rate of cargo, will be attained. To service this demand LR has developed a comprehensive modelling package, FLEET, which was set up for LNG transport but has now been adapted to cover any trading pattern. Returning to FSA, LR has recognised that any approach suitable for assisting IMO in setting the international framework of rules for shipping must be equally valid when looking at the Rules for classification. Changes to the Rules for classification are proposed for many reasons, including changes in technology and as a consequence of service experience, and the proposed changes could be tested by using a generic ship type risk model. It is possible to set up a number of generic models for this purpose and to assess the benefit of the changes. This approach would give greater transparency and objectivity to the rule making process of the classification societies.

FLEET
S y stem d e fin itio n S e rvice p r o file

O p e rations model

S imulation of p e rform a n c e

Fig 3 Outline of the FLEET modelling system

MANAGEMENT OF RISK AND RISK TARGETS

A safety regime that encompasses FSA would probably encourage wider application of risk based methods for ship management, promoting the use of decision making on the basis of risk analysis. LR has worked with shipowners for over twenty years on projects that involved the development of complex risk modelling of operational scenarios. In response to this situation LR developed a number of modelling packages including the FLEET system, which was specifically aimed at longevity studies for LNG liner trades. However, the system has been developed further so that it can be applied to any traffic pattern, using the model shown in Fig. 3. After configuring the system, service profile and operational constraints an estimate can be made of the likely outcome in terms of business goal achievement. With an ever tighter squeeze on financial performance modelling of entire enterprises has many merits and can provide a useful management tool when considering alternative strategies. In other industries it is quite normal to carry out project viability studies on a risk basis to determine whether there is an acceptable probability that the business objectives will be attained. In marine terms it is possible to use probabilistic modelling to assess the delivery rate of LNG between two terminals with a given fleet capacity, in probabilistic terms. Similarly the probability of a cruise ship achieving an acceptable level of destination arrivals can be estimated. Whilst not an exact science the results can provide considerable assistance is defining the business perspective. The same methods can be used to predict the likelihood of major casualties and to feed information to risk management systems. SURVEY OF EXISTING SHIPS The survey of ships in service by classification societies takes place at intervals that are prescribed in the Regulations. The survey frequency for major surveys has also become harmonised with the equivalent regime imposed by the various IMO Conventions and Codes. Any move to an alternative regime would either result in a break down of the harmonisation with statutory surveys or a major reconstruction of the entire safety survey programme, and to date there is no great evidence to suggest that such an overhaul is necessary or that it would produce significant benefits. Where particular problems have been identified, as with bulk carriers and large oil tankers, changes have been made in unison between statutory and classification requirements.

Fig 4 Collecting vibration data using portable data trap equipment

However, the approach to surveys can change to reflect different industry practices, provided that the alternative approach results in at least the same level of confidence that the ship continues to be in a condition that satisfies the requirements for classification. By way of example, the approach to the survey of machinery items has allowed a number of alternative schemes for many years. By implication these have progressively taken a greater account of the onboard maintenance regime, whilst seeking to ensure that the risk level is managed. Even with modern machinery that can be operated with extended periods between maintenance, it is not expected that heavily used ships will continue in operation for the full five year survey cycle without renewal of many component parts and overhaul of others. Equally, ships which are used intermittently may not build up sufficient running hours to attain the recommended maintenance interval. The approach of the classification society must therefore be flexible, recognising that patterns of use vary

considerably, and should not demand unnecessary opening up of machinery for survey when maintenance is not required. Coupled with a general examination at Annual Surveys, the machinery surveys are generally carried out on a continuous basis with approximately one fifth of the surveyable items examined each year. The widespread use of planned maintenance schemes has provided a controlled format for extension of the well-established authorisation of Chief Engineers to conduct surveys on certain items. Although in place for many years the concept of approving planned maintenance arrangements, accepting survey by approved Chief Engineers within that scheme and conducting an annual audit to confirm that the approved programme has been followed has proven to be an effective approach. This approach is recognised by a descriptive note under that ShipRight framework.

As the industry moves forward there is increased use of condition monitoring and more interest in condition based maintenance. LR has pursued an active interest in condition monitoring for over twenty years (9) and the research programmes have resulted in the design and development of effective condition monitoring systems and in considerable knowledge of the real achievable effectiveness of most available monitoring techniques. It has been accepted, and recognised by a descriptive note under the ShipRight framework, that condition monitoring plays a significant part in many planned maintenance schemes and LR will accept maintenance based on condition where an approved scheme is in operation. Condition monitoring, or perhaps more accurately condition assessment based on periodic vibration monitoring, was accepted as an alternative to opening up steam turbines over twenty years ago and this approach has been progressively extended to other rotating equipment. LR has installed Vibration Monitoring Systems (Fig 4) on a number of tankers, container ships, cruise liners and LNG ships (Fig 5) and has begun installation of an updated and extended Integrated Condition Monitoring System which is capable of providing effective monitoring of most shipboard machinery. It is expected that an increasing number of shipowners will adopt a condition based maintenance regime in order to control costs. LR is well placed to examine any proposed arrangements and has considerable experience to support the decisions that have to accompany the application of condition monitoring, where crews and surveyors must decide when interventions are required, taking cognisance of the recommendations of manufacturers, without examination of the items by direct inspection.

9 8 7 6 5 4 3 2 1 0 89 90 91 92 93 94 95 96 97 98 99

Fig 5 Installations of Condition Monitoring Systems by LR Perhaps the most heavily used application of condition monitoring to date has been the application of stern tube lubricant analysis. It has been shown conclusively that the intervals between tail shaft withdrawal can be extended without unacceptable increases in risk provided that a thorough monitoring programme is active. There is no evidence that this approach is any less effective than physical examination and there is less risk of damage as a consequence of dismantling and reassembly. It is interesting to note that some operators have installed condition monitoring systems, usually based on periodic measurement of vibration, but still retain the maintenance intervention schedule recommended by the equipment manufacturers. This suggests that operators are not prepared to rely on the measurements taken. An effective condition

monitoring approach should provide a flow of information for decision making, so that the risk of unexpected failure, and consequent restorative maintenance to effect a repair, can be avoided. As condition based maintenance finds increased support so the classification survey regime must adapt to reflect the change. It can easily be seen that unnecessary maintenance actions can result in maintenance induced failures and dismantling purely to satisfy a prescriptive and rigid survey regime should be avoided, but only where an effective system is in place that gives at least the same level of confidence in the condition of the machinery item concerned. Prescriptive time intervals may give way to a flexible arrangement that takes full account of the condition as determined by a set of monitored parameters. Confidence in a risk based survey approach will only grow with actual experience, and as that experience increases so the associated decision making process will mature. It is our expectation that the industry will also take steps to introduce reliability centred maintenance strategies. FEEDBACK FROM SERVICE EXPERIENCE Classification depends on the feedback of service experience to establish that the Rules are effective in achieving an appropriate level of safety and reliability. Feedback from design and construction are equally important as the Rules must also provide a suitable framework for the owner and builder in achieving a suitable new product. The application of any risk based approach, including the adoption of FSA within the rule making process, places greater requirements for high quality data on performance in service. The data that has served LR well is that collected systematically from survey reporting, together with information extracted for specific purposes from sources such as planned maintenance records (10). Feedback from service has now been advanced by the introduction of a new Ship Survey Reporting System using laptop computers and automated data extraction. Systematic collection of data within the marine industry in a co-operative manner would provide benefits if risk based methods are to find widespread effective application. It is expected that progressive introduction of standard data formats under the various STEP protocols will enable more use to be made of information that is collected for various purposes by permitting combination of data from several sources for analysis. There have been a number of attempts at establishing data collection arrangements but none has, to date, found acceptance. Meanwhile, risk assessment requires the use of data that costly to obtain and requires expert judgement to interpret and rank, in terms of severity, risk. CONCLUDING REMARKS The introduction of the ISM Code has introduced a new dimension to the way that safety is considered within the shipping community. Although at an early stage and despite considerable confusion in some quarters we are now faced with the challenge of working in an industry that will make greater use of risk based approaches. FSA differs from the safety case route in that it aims to support the rule making process at a generic level and to provide a logical methodology to establishing rules, which may well be predominantly prescriptive. LR has had an active involvement in the projects that resulted in the proposals to IMO and has taken steps to embrace the approach in its own development programme. The approach will encourage inter-disciplinary approaches to safety and should produce more effective rules, which address the problems identified in a holistic manner rather than in an ad hoc way. It is expected that the implementation of the ISM Code, together with the introduction of changes to STCW and the adoption of FSA, will advance the application of risk based thinking in the marine industries. LR has supported this philosophy for a long period and is encouraged to note this wider acceptance. The challenges presented by this change should not be underestimated but the potential benefits, not just in terms of safety, are worthy of pursuit. ACKNOWLEDGEMENT The author wishes to thank the Committee of Lloyd s Register of Shipping for permission to publish this paper. The views expressed are those of the author and do not necessarily represent the policy of Lloyd s Register of Shipping.

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2. 3. 4. 5. 6. 7. 8. 9..

10.

The Human Factor - A Report on Manning, United Kingdom Mutual Steamship Assurance Association (Bermuda) Ltd. (1998) Interim Guidelines for the Application of Formal Safety Assessment (FSA) to the IMO Rule-making Process, MSC/Circ.829 and MEPC/Circ.335, IMO (1997) E G Brennan and J H Peachey, Recent Research into Formal Safety Assessment for Shipping, Transactions of Lloyd s Register Technical Association Session 1995-6, Paper No 7, Lloyd s Register of Shipping (1996) Proceedings of the FSA Seminar held at IMO, 18 May 1995, Marine Safety Agency (1995) D S Aldwinckle and R V Pomeroy, A Rational Assessment of Ship Safety and Reliability, Transactions of Royal Institution of Naval Architects, RINA (1982) R V Pomeroy, The Role of Reliability in Marine Classification, Journal of Reliability Engineering, Pergamon Press (1985) J T Stansfeld, The Safety Case, Transactions of Lloyd s Register Technical Association Session 1994-5, Paper No 3, Lloyd s Register of Shipping (1994) J S Carlton, C G Holland, M J Newbury, D Rhoden and D A Triner, Condition Monitoring of Marine Machinery-Recent Research and Operational Experience, Transactions of Lloyd s Register Technical Association Session 1994-5, Lloyd s Register of Shipping (1995) R V Pomeroy, Reliability Data for Establishing Failure Tolerance, Jahrbuch der Schiffbautechnischen Gesellschaft 83.Band 1989, Springer Verlag (1990)