The Coast Guard’s proposed higher damage threshold triggering a marine casualty report is a good first step, but doesn’t quite go far enough.
That’s the sentiment contained in many of the comments on the rule that would put the new figure at $72,000 instead of the $25,000 marker that dates to the 1980s and has never been updated.
The Passenger Vessel Association (PVA) wants a $100,000 minimum, saying the $72,000 proposed figure already is outdated because it was based on 2015 statistics. PVA also wants to maintain the 1:4 ratio between the thresholds for a marine casualty and a serious marine incident (SMI). That would mean $400,000 instead of the Coast Guard’s proposed $200,000 — up from $100,000 — for SMIs, which require mandatory drug and alcohol testing.
PVA and others want regular adjustments for inflation and the final rule to be issued as soon as possible. The group says that the Coast Guard currently makes periodic adjustments to liability limits under the Oil Pollution Act of 1990 (OPA ’90).
“Not only will the proposal impose no costs, it will actually benefit the private sector by reducing regulatory burdens and costs,” said PVA whose members operate 1,257 passenger vessels. They also suggested several different gauges of a vessel’s repair costs rather than the Consumer Price Index for all Urban Consumers contained in the proposal, since “urban consumption has no relation to industry-specific indices.”
In raising the limits the Coast Guard acknowledged that the amounts have not kept pace with inflation so “relatively minor casualties must be reported,” which the agency said was never its intent.
The Coast Guard estimates that the rule would save the industry and federal government about $6.8 million over 10 years. And the service expects 316 fewer reports annually, for example, because “of the 5,967 marine casualty reports, approximately 5.3%” were for an incident only involving minor property damage.
A number of passenger vessel operators from across the country agreed with PVA, while the Coast Guard’s proposal also was supported by the Offshore Marine Service Association (OMSA), which suggested the limit be increased to “a more memorable figure of $75,000 or $100,000,” the Cruise Lines International Association (CLIA), the primary trade group for foreign-flag cruise ships, and by Canal Barge Co., Inc., New Orleans, which operates a fleet of 42 inland towboats and more than 800 barges.
“Updating the thresholds will not only save both the industry and the Coast Guard time and money, but also ensure that the Coast Guard has the ability to direct its attention and resources to high-consequence incidents,” wrote Canal Barge general counsel William Murphy.
In addition, the International Association of Drilling Contractors wants the Coast Guard to review the lower marine casualty thresholds that apply to the Outer Continental Shelf “with a view toward standardization.”
Comments were due by March 24 and may be seen at www.regulations.gov, Docket No. USCG-2016-0748.
