DSIP - Past, Present & Future, a Class perspective

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1 DSIP - Past, Present & Future, a Class perspective Ben K. Thompson Area Client Relations Manager for Western North America Marine and Offshore, Vancouver Office Working together for a safer world

2 Agenda Classification-What is it? Overview of DSIP LR and DSIP 2014-Present Day Acceptance into Class & ASD DSIP - Best Practices Future of DSIP Why choose LR

Delegation : DSIP - ASD AIC-Acceptance into Class AR-Authorized Representative ASD - Alternate Service Delivery CMD- Canadian Maritime Documents (certificates) CSA2001- Canada Shipping Act 2001 DSIP

3 Delegation : DSIP - ASD AIC-Acceptance into Class AR-Authorized Representative ASD - Alternate Service Delivery CMD- Canadian Maritime Documents (certificates) CSA2001- Canada Shipping Act 2001 DSIP Delegated Statutory Inspection Program DSIPLO - Delegated Statutory Inspection Programme Liaison Officer (TCMS Position) IACS-International Association of Class Societies LRCL- Lloyds Register Canada Ltd. MTRB Marine Technical Review Board RO Recognized Organization TCMSS Transport Canada Marine Safety & Security TOC Transfer of Class

How we started Our heritage is genuinely historic Formed in 1760 in Edward Lloyd s coffee house, located at Lloyds Lane and Fenchurch St in the City of London, to examine and classify merchant ships

4 How we started Our heritage is genuinely historic Formed in 1760 in Edward Lloyd s coffee house, located at Lloyds Lane and Fenchurch St in the City of London, to examine and classify merchant ships according to their condition, this was the origin of the Register Book and hence the name Lloyds Register. This is still the location of our Corporate HQ. We have over 250 years of global marine history The world s first ship classification society and this remains our core activity today. and we opened our first Canadian office in 1852 in Quebec City,this was the first office outside the UK, we have been there ever since!. Heritage an important part of our culture and forward-thinking approach to our business

Our governance Organisation structure Wholly owned by the Lloyd s Register Foundation, a UK charity dedicated to research and education in science and engineering.

5 Our governance Organisation structure Wholly owned by the Lloyd s Register Foundation, a UK charity dedicated to research and education in science and engineering. Lloyd s Register Group Limited (Lloyd s Register) heads operating group, 100% shares owned by the Foundation. No external shareholders, non-profit distributing. Lloyd s Register Foundation compliant with UK Charities Act.

Our mission Our organisation has a mission to protect life and property and advance public education and research We help ensure our clients assets and processes are safe, responsible and sustainable.

6 Our mission Our organisation has a mission to protect life and property and advance public education and research We help ensure our clients assets and processes are safe, responsible and sustainable. Our work benefits many aspects of people s daily lives. Committed to safety and innovation to benefit our future, our clients and for society. Delegated by over 120 countries to issue statutory certificates. This is the task of Lloyd s Register working together for a safer world.

Southampton Global Technology Centre working with the University of Southampton at the heart of world-class marine engineering and naval architecture Disciplines specialised in to meet current and

7 Southampton Global Technology Centre working with the University of Southampton at the heart of world-class marine engineering and naval architecture Disciplines specialised in to meet current and future maritime challenges: ship design and naval architecture, marine engineering and electrical systems advanced materials and structural integrity fluid dynamics and acoustics, oceanography, humanities and social sciences

8 Marine Consulting: Environmental: BWTS, EGCS,MRV. Alternate Fuels, Hybrid systems, Energy Optimization. Machinery and Hull Planned and Condition Monitoring. Support and assist owners in aspiring to MPMS,MCM, SCM,MCBM. Maintenance Strategy Optimization Technical Investigation Department TID, Damage investigations for over 50years. Human Factors, CFD and software development ATG. Risk Assessments, ARBD, FMECA Cyber-ship-development : Condition Based Maintenance- Axxim Autonomous ships advanced collision avoidance. Hull: trim optimization, condition assessment, hull design optimization, hull renovation

9 LR Canada Ltd - overview Organized into 2 areas, offices in all major ports in Canada. 40+ exclusive marine field surveyors and ISM auditors based in Canada Vancouver is our Hub office for Western North America 9 Operations, 3 Admin and 1 Client Relations New office opening on June 26 th 2017 in Victoria as a trial Surveyor stationed in Juneau in summer months as a trial Plan Approval Surveyor stationed in Vancouver as a trial Toronto Design Support Office TDSO, is the center for Marine Plan Approval activities in Americas. 40 staff Centre for plan approval of new and existing Canadian and Foreign flag vessels Applied Technology Group (ATG) Consulting Services in Halifax. 50 staff Government Liaison and Naval Ship Center of excellence in Ottawa.

10 What is Delegated to Class? Plan Appraisal and certification of: Hull and Machinery Load Line Domestic & International All TCMSS Regulations CSA 2001 Tonnage SOLAS 1974 as amended MARPOL I, thru VI (VPDCR) Type Approval Shipboard Oil Pollution Plan (SOPEP) and Shipboard Marine Pollution Emergency plan for Noxious Liquid Substances (SEMPEP) Ship Energy Efficiency Management Plan (SEEMPT) and issue International Energy Efficiency Certs Approval of Ballast Water Management Plan Approval Cargo Securing Manuals Component Inspection certificates as required Type Approval

CSA 2001 Regulations https://www.tc.gc.ca/eng/acts-regulations/acts-2001c26.

11 CSA 2001 Regulations Most used Hull Inspection, HIR Hull Construction, HCR Vessel Fire Safety Regulations (VFSR) replaced Fire Detection and Extinguishing Equipment Regs. in Feb Vessel Pollution and Dangerous Chemical (VPDCR) Marine Machinery MMR TP127 Electrical Load Line Life Saving Equipment Courtesy of Island Tug and Barge

12 What is NOT Delegated to Class? Registration of vessels MOSH Marine Occupational Health and Safety Regulations pursuant to the Canada Labour Code International Ship and Port Security ( ISPS code >500gt) Minimum Safe Manning Documents Training and Certification All exemptions from, or equivalency to, any requirement regarding the certificates. These can only be granted by the Marine Technical Review Board (MTRB). Determination of Closest Possible Compliance (Navigation Regulations) Suspend or Cancel any certificates issued on behalf of Canada.

13 What is the role of TCMSS when a vessel is delegated New Construction Will attend a project opening meeting to advise all parties of DSIP procedures and responsibilities During New construction projects or major conversion monitor class approved drawings (10%) May attend in new construction yard Will attend a closing meeting to ensure compliance with DSIP Existing vessels Will attend a hand-over meeting to advise all parties of DSIP procedures and responsibilities Will monitor vessel under Flag state inspection procedures. Must be advised by both the AR AND RO if there is any safety related or environmental incident. May attend vessel should an incident occur

14 History of DSIP Loadline and IOPP delegation for barges since 1980s. DSIP Introduced in 2000, First vessel was the LR Classed Great Laker Canadian Enterprise Only partial Delegation (Hull & Machinery) permitted on Passenger Vessels until 2008 Since 2008 all types of Classed vessels are eligible to enroll on DSIP BC Ferries Island Sky built at Vancouver Shipyard was 1 st Passenger vessel to be fully delegated in 2008 As part of DSIP of Passenger vessels a Mandatory Voluntary ISM system was applied as a condition of delegation. This condition no longer applies. Since 2014 all unclassed vessels >24m must enroll in DSIP at next docking Over the last 15 years, seven Class Societies have obtained RO status in Canada and are authorized to conduct surveys and inspections on behalf of the Canadian Flag, namely; LR, ABS, DNVGL, BV, NK, KR, RINA Governed by Canadian Shipping Act 2001 DSIP Agreement defines what regulations are delegated and which CMD (certificates) we are authorized to issue. RO submits MTRB submissions on application by AR. Acceptance of Type Approved products by RO s

15 DSIP, including ASD, since 2014 TCMSS and the RO agreed that all unclassed vessel >24m would be inspected by an RO at their first docking after Jan (unless Hardship measures are granted) Preferred option is to Class (Accept into Class) and Delegate them under the normal DSIP procedures. If Classing is not possible, then vessels can enroll in the Alternative Service Delivery (ASD) program under DSIP, whereby the RO would inspect to the TCMSS regulations (only) as a third party. ASD principles: Contract with RO to provide inspection services (normally starting with Quadrennial/Quinquennial), Unlike AIC, no pre-inspection is required. RO will perform all the due surveys that are shown in the Division 3 report. Class Rules will not be applied. Any and all deficiencies will be reported to TCMS and if the owner is unable to rectify them prior to re-entering service, TCMSS will advise their requirements, including need for MTRB exemptions.

16 Vessel types enrolled with LR since 2014 (Pacific Region only) Since 2014 and DSIP becoming mandatory for existing non-classed and imported vessels, LR s many types of vessels enrolling in DSIP: DSIP Vessels since 2014 with LR Tugs (13) Passenger vessels (6) Ferries (5) Super Yacht (1) Cable Ferries (5) Hovercraft (1) Oil Barges (4) (and 43 in Arctic) Dive Support vessel (1) Trawlers (4) Combined Oil/Deck Cargo barges (2) Oil Spill Response Vessels (3) Cable Layers (2) Combined Pax/Oil/Deck cargo (1) Fish Transporters (3) Patrol Vessels (2) Deck Cargo barges (12) LL delegated Sail Training Ship (1) Science Vessels (4) It is interesting to note we have seen several owners opting to enroll in DSIP on a voluntary basis for their vessels under 24m.

LR in DSIP LR s experience with the unclassed domestic vessel fleet has increased significantly since 2014.

Our Plan Appraisal Surveyors are experienced in applying Canadian Regulations Diagram on right does not include 15 more

17 LR in DSIP LR s experience with the unclassed domestic vessel fleet has increased significantly since Our Surveyors are experienced, well trained and knowledgeable about CSA2001. Our Plan Appraisal Surveyors are experienced in applying Canadian Regulations Diagram on right does not include 15 more recent DSIP projects: New Seabus, 3xBoom Boats, Sail Training Vessel 4xCable Ferries, 3xOFSVs, OOSV, 2xITB Pusher Tugs, 2xFish Packers, 3 xsalish Class Ferries, 2xShip Berthing Tugs

18 Acceptance into Class (AiC) Process Pre-inspection is performed by a Senior Surveyor to generally assess the vessel s condition The following items are also considered : Availability of the original construction plans (hull, machinery, electro-technical, statutory) History of vessel since build covering any modifications or replacement of components Availability of plans for past modifications Details of any major refit to be carried out at time of entry into class If above items found satisfactory and local LR Management can support AIC, then recommendation to AIC sent to LR HQ HQ review the case and provide requirements to be followed, and normally includes: Special Surveys/Docking and plan review of the previously approved TCMSS drawings. Survey reports and PA s Design Appraisal Documents would be reviewed by HQ to ensure all instances where the current arrangements are not in accordance with LR rules are acceptable based on; actual arrangements, compliance with TCMS regulations and good service history.

19 Alternate Service Delivery ASD is an addition to DSIP. RO Surveyors will perform 3 rd Party inspections on behalf of TCMSS applying CSA2001 regulations only. RO will issue CMD Certificate on satisfactory completion of inspection. Process: Owner contacts RO prior to next docking to request confirmation of interest and quotation Owner provides vessels Registration cert and TCMSS Division 3 report to enable an accurate quotation Once quotation is accepted, then RO provides a letter of support to act as RO DSIP application and RO letter of support to TCMSS On acceptance by TCMSS a handover inspection planned usually at docking - may take place at annual survey On completion of inspection LR will issue TCMSS certificates

20 Are Class Rules and IMO Conventions applied for ASD vessels? Where referenced by CSA 2001 or where TCMSS regs are non-specific or outdated LR Class Rules may be applied where TCMSS regulations are non specific (example is Thickness Measurements) IMO conventions (SOLAS, MARPOL) are applied by reference through CSA2001 regs. Where applicable to vessel size >400gt) Ex. VPDCR Marpol VI (air pollution) Option to use Canadian SOLAS supplement for new construction and imported vessels

21 DSIP Exemption Process TP E 7.3 TCMSS may consider an exemption from DSIP accompanied by the documentary evidence including at least one (1) of the following three (3) circumstances: a) Financial Hardship: Despite taking all reasonable steps to comply with the Tier I Policy Certification of Vessels of 24 Metres in Length and Above, the burden of compliance costs would create a serious economic hardship for the company. The AR must submit at least one quote received from the ROs, as well as verified financial statements. The factors listed below will be taken into account when determining serious economic hardship: Compliance with the Policy would require an unreasonable change in the business activities of the company as to compromise the economic or commercial viability of the trade or business in which the vessel operates or the service it provides; or It is reasonable to expect that the trade, business or service provided will continue only if the vessel continues to obtain its CMDs and the inspections mentioned in 4.1 from TCMSS.

22 DSIP Exemption Process (cont..) b) Inability to receive services from ROs: (eg wooden hull) All ROs except for one (1) have clearly indicated their refusal to enter into an agreement to issue CMDs and/or conduct the inspections mentioned in 4.1 for the vessel in question. All refusal s/letters indicating refusal of service have to be provided to TCMSS; or c) Remote locations This applies to vessels operating solely within the following Areas of Operations 1 : Alberta, Manitoba, Saskatchewan, Yukon, Northwest Territories and Nunavut; or North of 52 degrees for: Ontario, Quebec and Newfoundland and Labrador north, including coast of James Bay; or North of 52 degrees in British Columbia and more than 150km from Prince Rupert. 1 Areas of Operations: vessel operates only in the areas identified, and does not have a port of call or dry docking location outside of the identified locations.

23 Considerations for DSIP success Encourage early engagement with TCMSS Allow enough time to make the application and enroll in DSIP Handover surveys need to be proactively managed by AR Ensure that the RO is only applying CSA2001 requirements for ASD vessels Be prepared for remedial repairs at first RO quadrennial survey Owners to remember their obligation to report of defects that affect certification and ensure surveys are arranged when due Be aware of risks if TCMS allow outstanding items and MTRBs to be carried over at the hand-over survey Ensure that all plans that should be onboard for CSA2001 are onboard at ASD handover. Ensure that any vessel modifications do not affect a change of vessel type or service For Newcon: Establish the applicable Regulatory Regime as early as possible for newbuilds/imports, and what may constitute a major modification or hybrid mod. Understand the risks involved in not defining responsibility of RR compliance including MTRBs. (the foreign shipyard/seller may not understand, or want to assume these risks) Obtain any LOAIP (in advance of registration & MTRB) as early as possible for newbuilds and imports Delivery conditions and delivery flag to be understood (eg Salish Class well planned) AR to be aware of what they and the shipyard are and are not responsible for wrt DSIP EARLY ENGAGEMENT AND GOOD PLANNING IS ESSENTIAL

LR Advisory Services for Owners Plan Approval non-dsip vessels Acceptance in Principle (AiP) Regulatory Regime, ie Project Description Document Statements of

24 LR Advisory Services for Owners Plan Approval non-dsip vessels Acceptance in Principle (AiP) Regulatory Regime, ie Project Description Document Statements of Compliance GAP analysis (PA and onboard) Pre-purchase and condition surveys Representation at foreign shipyards Risk Assessments (HAZID/HAZOP) Full range of consulting services

25 Advantages of Acceptance into Class What are the advantages of AIC v s ASD: Commercial Can be pre-requisite for bidding on work Resale value could be higher The vessel could re-flag out and return to Canada flag at a later date without being considered a new vessel Class items (Hull, Machinery, Electrical) can be dealt with solely by LR and COC issued where appropriate without need for MTRB Technical Take advantage of Class survey techniques which utilize clients maintenance management programs. This offers an opportunity to align maintenance and class surveys where focus is on improving plant reliability while reducing costs. MPMS Machinery Planned Maintenance scheme SCM Screw Shaft Condition Monitoring Follow 5 year class cycle Many optional Class notations demonstrate compliance with highest standards

26 CDLIVE Screen illustrating Class Notation, Surveys and Statutory regime Example Class notation: 100A1 SSC PATROL, MONO,HSC,G4,EP Near Coastal Voyage, Class 1, Limited Home Trade 2, (NC1,limited HT2) MCH, UMS, CCS, ICC, PSMR Descriptive Note: Green Passport

27 Future of DSIP What might TCMS do next: Modernize it s Regulations, eg VFSR and Fishing vessel regs, HCR next?? Reduce the mandatory DSIP length from >24m probably not but possible Encourage voluntary DSIP Make ISM mandatory for certain vessel types and sizes What might Industry like TCMS to do next: Adopt, more international regulations and phase out existing CSA2001 Reduce project risk by obtaining TC agreement Regulatory Regimes and MTRBs at project inception Change process for MTRB exemptions by streamlining based on advice received from RO s SMEs and a calculated risk What LR might do next: Perform more Plan Appraisal on behalf of TCMS for non-dsip vessels More Type Approval and Product Approvals Reduce involvement in ASD as vessels numbers, eventually to zero, over time

What sets us apart: Independence Independence from shareholder dividends and government control. Reputation as an independent body has been built up over 250 years.

28 What sets us apart: Independence Independence from shareholder dividends and government control. Reputation as an independent body has been built up over 250 years. Impartial and informed advice that clients can trust, free from compromise, free from prejudice. We support our clients to meet demands for transparency, environmental stewardship, corporate responsibility, profitability and safe, sustainable operations.

29 Why choose LR for your DSIP vessels The largest Class society (RO) in Canada, we have extensive experience in addressing and interpreting Canadian regulations Most resources available, surveyors located in main ports across Canada, plan approval and Class/ DSIP desk based in Toronto. Dedicated Client Support. Consulting services based in Halifax, Government liaison office in Ottawa We have the most vessels enrolled in DSIP Strong technical support machinery, electrical, hull problems Strong focus on emerging technologies, (Cyber Ship). Strong relationship with TCMSS in Ottawa and their Regional offices Access to CDLive (on line survey and information tool). Just launched MyBuild Plan Approval database with designer, shipyard and owner access if req d+

30 Ben K. Thompson Client Relations Area Manager North America West, Vancouver Office T E ben.thompson@lr.org Questions? Lloyd s Register Canada Ltd West Esplanade, North Vancouver, BC, V7M 3J3, Canada Working together for a safer world Lloyd s Register and variants of it are trading names of Lloyd s Register Group Limited, its subsidiaries and affiliates. Copyright Lloyd s Register [Entity] A member of the Lloyd s Register group.

Fartygsklassificering

MARITIME Fartygsklassificering Sjöfartens Dag 2015 David Wendel 21st of May 2015 1 DNV GL 21st of May 2015 SAFER, SMARTER, GREENER Creating a leading company to safeguard life, property and the environment