[House Hearing, 110 Congress] [From the U.S. Government Publishing Office] OIL SPILL IN NEW ORLEANS IN JULY 2008 AND SAFETY ON THE INLAND RIVER SYSTEM ======================================================================= (110-167) HEARING BEFORE THE SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION OF THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION __________ SEPTEMBER 16, 2008 __________ Printed for the use of the Committee on Transportation and Infrastructure U.S. GOVERNMENT PRINTING OFFICE 45-023 WASHINGTON : 2008 ----------------------------------------------------------------------- For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE JAMES L. OBERSTAR, Minnesota, Chairman NICK J. RAHALL, II, West Virginia, JOHN L. MICA, Florida Vice Chair DON YOUNG, Alaska PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee Columbia WAYNE T. GILCHREST, Maryland JERROLD NADLER, New York VERNON J. EHLERS, Michigan CORRINE BROWN, Florida STEVEN C. LaTOURETTE, Ohio BOB FILNER, California FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas JERRY MORAN, Kansas GENE TAYLOR, Mississippi GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland ROBIN HAYES, North Carolina ELLEN O. TAUSCHER, California HENRY E. BROWN, Jr., South LEONARD L. BOSWELL, Iowa Carolina TIM HOLDEN, Pennsylvania TIMOTHY V. JOHNSON, Illinois BRIAN BAIRD, Washington TODD RUSSELL PLATTS, Pennsylvania RICK LARSEN, Washington SAM GRAVES, Missouri MICHAEL E. CAPUANO, Massachusetts BILL SHUSTER, Pennsylvania TIMOTHY H. BISHOP, New York JOHN BOOZMAN, Arkansas MICHAEL H. MICHAUD, Maine SHELLEY MOORE CAPITO, West BRIAN HIGGINS, New York Virginia RUSS CARNAHAN, Missouri JIM GERLACH, Pennsylvania JOHN T. SALAZAR, Colorado MARIO DIAZ-BALART, Florida GRACE F. NAPOLITANO, California CHARLES W. DENT, Pennsylvania DANIEL LIPINSKI, Illinois TED POE, Texas NICK LAMPSON, Texas DAVID G. REICHERT, Washington ZACHARY T. SPACE, Ohio CONNIE MACK, Florida MAZIE K. HIRONO, Hawaii JOHN R. `RANDY' KUHL, Jr., New BRUCE L. BRALEY, Iowa York JASON ALTMIRE, Pennsylvania LYNN A WESTMORELAND, Georgia TIMOTHY J. WALZ, Minnesota CHARLES W. BOUSTANY, Jr., HEATH SHULER, North Carolina Louisiana MICHAEL A. ARCURI, New York JEAN SCHMIDT, Ohio HARRY E. MITCHELL, Arizona CANDICE S. MILLER, Michigan CHRISTOPHER P. CARNEY, Pennsylvania THELMA D. DRAKE, Virginia JOHN J. HALL, New York MARY FALLIN, Oklahoma STEVE KAGEN, Wisconsin VERN BUCHANAN, Florida STEVE COHEN, Tennessee ROBERT E. LATTA, Ohio JERRY McNERNEY, California LAURA A. RICHARDSON, California ALBIO SIRES, New Jersey DONNA F. EDWARDS, Maryland (ii) ? SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION ELIJAH E. CUMMINGS, Maryland, Chairman GENE TAYLOR, Mississippi STEVEN C. LaTOURETTE, Ohio RICK LARSEN, Washington DON YOUNG, Alaska CORRINE BROWN, Florida HOWARD COBLE, North Carolina BRIAN HIGGINS, New York WAYNE T. GILCHREST, Maryland BRIAN BAIRD, Washington FRANK A. LoBIONDO, New Jersey TIMOTHY H. BISHOP, New York, Vice TED POE, Texas Chair JOHN L. MICA, Florida LAURA A. RICHARDSON, California (Ex Officio) JAMES L. OBERSTAR, Minnesota (Ex Officio) (iii) CONTENTS Page Summary of Subject Matter........................................ vi TESTIMONY Allegretti, Thomas A., President and CEO, American Waterways Operators...................................................... 36 Block, Richard A., Secretary, National Mariner's Association..... 36 Dawicki, Eric, President, Northeast Maritime Institute........... 36 Munoz, Mario A., Vice President of Vessel Operations, American Commercial Lines............................................... 36 Stroh, Captain Lincoln D., Sector Commander, Captain of the Port, Sector New Orleans, United States Coast Guard.................. 7 Tellez, Augustine, Executive Vice President, Seafarers International Union............................................ 36 Watson, IV, Rear Admiral James, United States Coast Guard, Director of Prevention Policy for Marine Safety, Security and Stewardship.................................................... 7 Westerholm, David, Director, Office of Response and Restoration, National Oceanic and Atmospheric Administration................ 7 PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS Cummings, Hon. Elijah E., of Maryland............................ 52 PREPARED STATEMENTS SUBMITTED BY WITNESSES Allegretti, Thomas A............................................. 68 Block, Richard A................................................. 83 Dawicki, Eric.................................................... 85 Munoz, Mario A................................................... 97 Tellez, Augustine................................................ 106 Watson, IV, Rear Admiral James................................... 109 Westerholm, David................................................ 116 SUBMISSIONS FOR THE RECORD Allegretti, Thomas A., President and CEO, American Waterways Operators: Responses to questions from Rep. Cummings...................... 74 Response to issues raised during hearing....................... 78 Munoz, Mario A., Vice President of Vessel Operations, American Commercial Lines, response to issues raised during hearing..... 104 Watson, IV, Rear Admiral James, United States Coast Guard, Director of Prevention Policy for Marine Safety, Security and Stewardship: Response to request for information............................ 18 Response to request for information............................ 28 ADDITIONS TO THE RECORD Seaman's Church Institute, Eric K. Larsson, Director Maritime Training and Education, letter to the Subcommittee............. 119 Waits, Emmett, and Popp, L.L.C., Randolph J. Waits, Attorney at Law, letter to Subcommittee regarding invitation of Daniel Dantin to testify.............................................. 125 [GRAPHIC] [TIFF OMITTED] T5023.001 [GRAPHIC] [TIFF OMITTED] T5023.002 [GRAPHIC] [TIFF OMITTED] T5023.003 [GRAPHIC] [TIFF OMITTED] T5023.004 [GRAPHIC] [TIFF OMITTED] T5023.005 [GRAPHIC] [TIFF OMITTED] T5023.006 [GRAPHIC] [TIFF OMITTED] T5023.007 [GRAPHIC] [TIFF OMITTED] T5023.008 [GRAPHIC] [TIFF OMITTED] T5023.009 [GRAPHIC] [TIFF OMITTED] T5023.010 [GRAPHIC] [TIFF OMITTED] T5023.011 [GRAPHIC] [TIFF OMITTED] T5023.012 [GRAPHIC] [TIFF OMITTED] T5023.013 [GRAPHIC] [TIFF OMITTED] T5023.014 [GRAPHIC] [TIFF OMITTED] T5023.015 [GRAPHIC] [TIFF OMITTED] T5023.016 [GRAPHIC] [TIFF OMITTED] T5023.017 [GRAPHIC] [TIFF OMITTED] T5023.018 [GRAPHIC] [TIFF OMITTED] T5023.019 [GRAPHIC] [TIFF OMITTED] T5023.020 [GRAPHIC] [TIFF OMITTED] T5023.021 [GRAPHIC] [TIFF OMITTED] T5023.022 [GRAPHIC] [TIFF OMITTED] T5023.023 HEARING ON OIL SPILL IN NEW ORLEANS IN JULY 2008 AND THE SAFETY ON THE INLAND RIVER SYSTEM, ---------- Tuesday, September 16, 2008, House of Representatives, Committee on Transportation and Infrastructure, Subcommittee on Coast Guard and Maritime Transportation, Washington, DC. The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 2167, Rayburn House Office Building, the Honorable Elijah E. Cummings [Chairman of the Subcommittee] presiding. Mr. Cummings. This hearing is called to order. It is my understanding that Mr. LaTourette is on his way. We are going to get started because we have a vote coming up fairly soon. The Subcommittee will come to order. Before we begin this morning, we commend the United States Coast Guard for the work they are undertaking, even now, to aid those who have been so terribly affected by Hurricane Ike. It is in these times of national emergency that we see the dedication that our thin blue line at sea, the Coast Guard, brings to its work aiding those in peril, and we thank them for their heroic efforts. The Subcommittee convenes today to examine the circumstances surrounding the spill of nearly 300,000 gallons of Number 6 fuel oil into the Mississippi River near New Orleans on July the 23rd. We will also take a broader look at the significant safety issues in the towing industry highlighted by the accident that caused the spill. The July 23rd spill occurred when a towing vessel pushed a tank barge into the path of an oncoming tanker. The towing vessel involved in the casualty, the Mel Oliver, was not being operated at the time of the collision by a properly licensed master. Instead, it was being operated by a person holding only an apprentice mate's license, who was not authorized to operate a towing vessel without the presence of a licensed master in the wheelhouse. DRD Towing, the firm operating the Mel Oliver, has a history of operating vessels without properly licensed personnel. Less than two weeks before the accident involving the Mel Oliver, DRD was apparently illegally operating the towing vessel Ruby E with a person holding only the apprentice mate's license when the vessel sank. DRD Towing has also been cited by the Coast Guard for operating towing vessels without properly licensed personnel in several previous occasions. DRD was a member of the American Waterways Operators, the industry trade association for the tug and barge industry, at the time of the collision between the barge being pushed by Mel Oliver and the tank vessel, and at the time of the sinking of the Ruby E. However, in May, the firm failed the safety audit that AWO requires as a condition of membership in its association. The audit is the cornerstone of the program AWO terms the Responsible Carrier Program, which it argues is designed to ensure safety in the towing industry. Only after the accident between the Mel Oliver and the tank vessel did the Coast Guard systematically check other DRD- operated towing vessels in the New Orleans area to ensure that they were operated by fully licensed personnel. However, the fact that this firm could sink one towing vessel and then, less than two weeks later, cause a major collision with another towing vessel, when neither was being operated with properly licensed personnel, and that too, after having been cited on previous occasions for such violations suggests to me that either this firm was truly negligent or that its managers felt that there was little risk of being caught while operating without properly licensed personnel. One of the deck hands on the Mel Oliver tested positive for the use of illegal drugs. This is likely an incidental finding. However, to be frank, there are widespread claims among those who work in the towing industry that the operation of the towing vessels without properly licensed personnel is common and that drug use is prevalent in the industry, and I must say that that is a very, very, very, very troubling and very sad commentary. Similar claims that violations of the rule that forbids licensed personnel from working more than 12 hours in a 24-hour period are also common. Simple mathematics would suggest that it would be very difficult for licensed individuals to comply with this limitation when there are only two such personnel on a towing vessel. At the time of the accident, on July 23rd, the towing vessel, Mel Oliver, was chartered by its owner, American Commercial License, to DRD under a bareboat charter and then hired back by ACL on a fully found charter. This arrangement does not appear to have been designed to generate revenues for ACL. Rather, it appears to have been designed to enable ACL to operate its vessel at the cheapest possible cost, by shifting maintenance responsibilities and, more importantly, the hiring of crew members into DRD, a firm that was obviously ill prepared to meet these responsibilities, but with which ACL had nonetheless done business for a decade. According to statistics provided by the Coast Guard, between 2000 and 2008, ACL, which is currently the second largest firm in the towing industry, has had eight deaths or missing persons on vessels for which it was the managing owner, more than on vessels under any other managing owner in the towing industry save for fatalities arising from a single accident involving another firm in 2001. We have before us today a very troubling portrait of an industry that is essential to commerce in our Nation. However, unlike in many instances in which problems are prevalent within a given industry, the Coast Guard appears to have all the authority it needs to deal with many of these issues. The Coast Guard has had the authority since 2004 to set hours of service limits on towing vessels but has not chosen to exercise this authority, despite widespread agreement that human factors, and particularly fatigue, are among the most prevalent of all causes of casualties on towing vessels. Similarly, Congress passed a law in 2004 finally bringing towing vessels under inspection requirements, requirements from which vessels currently in operation had been exempt for decades simply because they were powered by diesel engines rather than steam engines. As part of the inspection process, the Coast Guard will be required to set manning levels. However, now four years later, the Coast Guard has not even published notice of proposed rulemaking to initiate the effort to complete the rules needed to create the inspection process. This rulemaking is one of more than 100 pending within the service. A major part of effective leadership is having a sense of urgency and acting on that urgency, and because of the failure to act on that urgency, I think that that is why we are here today discussing the problem that we have today, in part. Today, we will examine these issues in more detail and identify the steps that need to be taken to ensure that the towing industry is as safe as it can possibly be. We look forward to hearing from representatives of the Coast Guard and NOAA, as well as the American Commercial Lines, the American Waterways Operators, the Northeast Maritime Institute, the Seafarers International Union, and the National Mariners Association. I note that we invited DRD to attend this hearing. DRD's owner, Daniel Danton, responded to the Subcommittee's request for him to appear through counsel, stating the following: ``Although the Department of Justice has given Mr. Danton no indication that he is a target or subject of any investigation, given the ongoing United States Coast Guard formal hearing and the United States Justice Department's involvement in this matter, Mr. Danton would, if subpoenaed to the congressional hearing, refuse to testify and invoke the Fifth Amendment privilege against self-incrimination.'' Having received that letter, I decided that we would not subpoena him in today because I think the letter speaks for itself and, from a very practical standpoint, it makes more sense for us not to waste our time. I ask that DRD's full letter to the Subcommittee be included in the hearing record and, without objection, it is so ordered. With that, I recognize our distinguished Ranking Member, Mr. LaTourette. Mr. LaTourette. Thank you, Mr. Chairman, and thank you for holding this hearing. On July the 26th of this year, two vessels collided in the middle of the night, resulting in the release of nearly 300,000 gallons of fuel oil into the lower Mississippi River near New Orleans. The Coast Guard has completed a preliminary investigation into the cause of the collision and a more detailed investigation is ongoing. While the circumstances leading to the collision raise several questions for the Subcommittee to examine this morning, I would be remiss if I did not recognize the comprehensive and successful response efforts by the Coast Guard, NOAA's Office of Response and Restoration, and the State and industry officials. The recent spill in New Orleans was more than five times larger than last year's spill in the San Francisco Bay. The spill did cause significant economic damages due to the closure of the Mississippi River and the subsequent impact on local and upriver industries and agriculture. Yet, through the combined efforts of Federal, State, and industry stakeholders, damages to the local environment were kept to a minimal level. The incident that resulted in the oil spill involve a towing vessel which is currently not a class of vessels that are inspected by the Coast Guard. Congress has directed the Coast Guard to establish a safety management system for towing vessels nearly four years ago; however, no system has been developed to date. I hope that the witnesses will give the Subcommittee an update on the status of this rulemaking and the ongoing discussions between the service industry officials and mariner groups. It is important to note, however, that no inspection regime would prevent individuals determined to operate vessels in violation of the law, which appears to be the case in this incident. In previous hearings before this Subcommittee, witnesses have discussed the difficulties in maintaining sufficient number of maritime workers in the inland barge industry. I am curious to hear from the witnesses today whether those workforce pressures contributed to this or other incidents, and whether the looming implementation of the TWIC card will exacerbate any workforce shortage. The Subcommittee has also been concerned for some time about the solvency of the Oil Spill Liability Trust Fund. On several occasions, the Subcommittee has required the Coast Guard to study issues that might have a negative impact on the Fund. One such impact may be the unprocessed claims for damages that resulted from Hurricane Katrina and those that may be forthcoming from this year's storms. The recent oil spill in New Orleans underscores the importance of planning and preparation on the part of government officials and vessel operators to respond to oil spills and their effect in the future. I want to thank the witnesses and the organizations that they represent for their continued work to prevent future oil spills and to minimize the impacts that happen when those occur. Mr. Chairman, I do want to express my concern, as I have expressed in a couple of other hearings. It makes me nervous when we have subpoenaed witnesses, people that are involved in active litigation against other witnesses or other people who are not witnesses, and again that appears to be the case. The majority has, my understanding, subpoenaed NMI, which is in an active legal dispute with American Commercial Lines. I know that the Chairman is more than fair and he recognizes that these forums are not to be used to give one side a leg up, if you will, in litigation, and I would hope that you continue that record of fairness today, and I yield back my time. Mr. Cummings. I want to thank the gentleman for his statement. One of the things, as you and I, as attorneys, and trial attorneys, at that, know--I am very, very sensitive to those kinds of issues that you just raised, and one of the things that I try to do is try to make sure that we are fair to the witnesses, just like you just said, but at the same time without prejudicing them, bringing prejudice upon them, that we still do our job. So it is kind of a tricky balance but, that being said, we will proceed very carefully. I want to thank you. It is interesting. Every morning I read, as part of my sort of daily devotions, you might call them, little passages, and it just so happens, as I was listening to Mr. LaTourette, I couldn't help but think about something that I read this morning. It says accept the fact that you can make excuses and you can make money, but you can't do both. I think what I am concerned about, to the Ranking Member, is that, as I listened to your statement, I just want to make sure that we are doing everything in our power to make sure these things don't happen again. You have heard me say many times that I worry about this Country and how, in so many areas, we have fallen into a culture of mediocrity. I think Katrina showed us how bad it can get when the rubber meets the road, and then when the rubber meets the road you discover there is no road. I think we see it in what is happening here today in our financial world, and we can go down the line. I am not blaming anybody, I am just saying we can do better. And I say this at this juncture not knocking my good friend, it is just that I believe that I want our witnesses to come forth with suggestions as to how we can solve these problems. We cannot have oil spilled all over our waterways, I am sorry. We can do better than that. And we can make excuse after excuse after excuse, but we have to put in the kind of rules. We must have a sense of urgency. We must do the things that we need to do to ensure that these things don't happen. Yes, there are going to always be mistakes. There is always going to be human error, I got that. But this is our watch. This is our watch. We are watching our environment; we are watching our Coast Guard. It is our watch. I want to make sure that those who come forward come forward with suggestions as to how we can address these issues. With that, Mr. Taylor. Mr. Taylor. Thank you, Mr. Chairman. I want to thank our witnesses for being here. Although, at times, I am probably the hardest guy in the room on the Coast Guard, I also want to let you know that I have the most empathy for you, and I realize that Congress and the Administration, on a regular basis, give you more jobs to do and the budget increases often don't match that. A couple things I would like you to mention in your testimony, though, Admiral and Captain, is what are the fines and/or penalties for operating a vessel without a licensed captain and/or without the proper tonnage of that captain, the reason being that I suspect--I certainly don't know--that there are companies out there who are saving money by operating vessels without a licensed captain or with someone with a smaller license than the vessel requires, which in turn gives them an economic advantage, and we end up punishing the people who are living by the rules and we end up, by lack of enforcement, giving people who don't live by the rules a leg up. The second thing I would hope you would address, in going back to that, I really do empathize with your challenges, but I do remember from the old days that the Coast Guard used to conduct twice daily harbor patrols in New Orleans; at least one during the day, at least one at night. Part of that was to look for load line violations, oil spills, but also part of it, on a regular basis, was simply stopping vessels to check and see if the person in the wheelhouse was licensed. I am just curious, given the demands on your time with all the new missions and also the high price of fuel, and my memory that during certain portions of the year the boat crews were told, hey, don't get underway unless it is an absolute emergency. Is that a contributing factor to what might be a lack of enforcement in this area that might have been a contributing factor to this accident? Again, I am not looking for the Coast Guard to beat up on themselves, but if it is a financial problem that is resulting in a lower exposure out on the river due to funding, then it is something the Congress certainly needs to be aware of and hopefully we can address in the next budget. So, again, I want to thank our witnesses for being here. Mr. Chairman, I want to thank you for calling this hearing. Mr. Cummings. Ms. Richardson. Ms. Richardson. Yes. Good morning. Thank you, Mr. Chairman. Mr. Chairman, I want to thank you and Ranking Member LaTourette for holding this hearing on the Mississippi River oil spill which took place at 1:30 a.m. on Wednesday, July 23rd, 2008, near the city of New Orleans. I, like many of my colleagues here today, view the maritime industry as an economic lifeline to my congressional district and to many districts throughout this Country. While this accident may have occurred in one place, what was evident to me when I was attending this Committee's field hearing last year on the COSCO BUSAN is that the tragic maritime accidents not only put our environment and our human health in jeopardy, but it also has the ability to devastate our national economy as well. Given the serious nature of maritime accidents, all must be done to hold those responsible in accordance with the law and actively review the Coast Guard's response after the accident took place. It is my hope today that the lessons learned from the COSCO BUSAN disaster are being applied, and I want to hear in the testimony today what was learned, what did you apply that hopefully helped us respond better in this particular situation. Today's witnesses' testimony will provide, hopefully, an accurate assessment of what exactly transpired on the morning of July 23rd on the Mississippi. I would like to remind those giving testimony that you sit here today not just in front of this Committee, but in front of the entire American people who are really, this is one accident after another accident after another accident. So I concur with my colleagues that I really would like to hear an honest answer. If there is something that we need to do in terms of financially providing an adequate budget for you to do your job effectively, you need to tell us, because this Committee stands willing and ready and able to address this issue, but we can only do it if there is no fear from the Administration, there is no golden cows out there. We need to know from you honestly do you have the resources and do you have the capability to do this job effectively, because we have had one too many accidents. Thank you, Mr. Chairman. Mr. Cummings. I want to just take a moment to echo what Mr. Taylor and Ms. Richardson just said, and I am sure Mr. LaTourette joins with me in this. We want the Coast Guard to be the very, very best that it can be, and I am really, really curious about this rulemaking, I am curious about the things that Mr. Taylor raised, and we will fight for the resources the Coast Guard needs. But I want to be clear that I realize that resources are not just the answer. See, if resources were the answer, a whole lot of things in our world would be resolved. You must couple resources with motivation. So whatever it takes for us to get there, we want to get there. So you need to let us know, because we will fight for those resources because we know that the Coast Guard will use them effectively and efficiently, and then we will hold you to a high standard. But we have got to know what you need. So, with that, we will call on Rear Admiral Watson, James Watson, IV, who is the Director of Prevention Policy for Marine Safety, Security and Stewardship, with the United States Coast Guard, and Mr. David Westerholm, who is the Director of the Office of Response and Restoration with the National Oceanic and Atmospheric Administration. We welcome your testimony. I understand, Captain Stroh, you are standing by just in case there are questions that you may have to answer. Is that right? Captain Stroh. I have an opening statement. Mr. Cummings. You have an open statement? Captain Stroh. Yes, sir. Mr. Cummings. Fine. We will hear from you. Why don't we start with you? We will start with you, since I didn't know you had one. Captain Stroh. Yes, sir. Mr. Cummings. All right. TESTIMONY OF CAPTAIN LINCOLN D. STROH, SECTOR COMMANDER, CAPTAIN OF THE PORT, SECTOR NEW ORLEANS, UNITED STATES COAST GUARD; REAR ADMIRAL JAMES WATSON, IV, UNITED STATES COAST GUARD, DIRECTOR OF PREVENTION POLICY FOR MARINE SAFETY, SECURITY AND STEWARDSHIP; DAVID WESTERHOLM, DIRECTOR, OFFICE OF RESPONSE AND RESTORATION; NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION Captain Stroh. Good morning, Chairman Cummings, Ranking Member LaTourette, and other Members of the Subcommittee. Rear Admiral Whitehead of the Eighth Coast Guard District sends his respects. He was unable to attend today's proceedings as he responds with Sector Houston to the aftermath of Hurricane Ike. As the Coast Guard's local commander for Sector New Orleans, I am the Federal On-Scene Coordinator, FOSC, for oil spills in the Southeast Louisiana coastal zone, including the Mississippi River. As FOSC, I coordinate Federal Government's response to spills, work closely with State and parish governments, and lead a unified command of responders, including the responsible party, to mitigate the effects of spills, clean the environment of hazardous substances, and re- establish the marine transportation system. The DM 932 oil spill was a challenging spill in a complex river environment, affecting a critical waterway vital to this Nation's economy. Federal, State, and parish agencies came together with the responsible party to quickly marshal over 2,000 oil spill responders to clean over 100 miles of river, over 1190 vessels, and salvage a leaking, mangled barge in 80 feet of water, all while beginning to move ship traffic on day five, with ship traffic back to normal in day seven. The Coast Guard's new sector organization served this incident well. As sector commander, I had all the authorities and all the Coast Guard resources at my disposal, and I used them: the Vessel Traffic Center to manage traffic, the Command Center to close the port, the small boat station to enforce the safety zone, and the air station to overfly the spill zone, the pollution responders to respond, the casualty investigators to investigate, the marine inspectors to oversee the salvage, the safety staff to oversee safety, Coast Guard cutters for on- scene presence, the planners to create action plans, the logistics personnel for unified command support, the auxiliarists to support the supporters, and reservists to backfill the active duty. My authorities as Federal On-Scene Coordinator, Search and Rescue Mission Coordinator, Officer in Charge Marine Inspections, and Captain of the Port were all used in a complimentary fashion as this event unfolded. Mission execution was enhanced through this organization and its single repository for authorities. Though the salvage and spill response could be called a success, the reason for this spill must be investigated and a cause determined. My investigators, in collaboration with the Eighth Coast Guard District's formal investigation, are working with the National Transportation Safety Board to find that cause and learn from it. Thank you for the opportunity to appear here today, and I am happy to answer any questions after the other Members give their opening remarks. Mr. Cummings. Thank you, Captain Stroh. Rear Admiral James Watson. Admiral Watson. Good morning, Chairman Cummings, Ranking Member LaTourette, and other Members of the Subcommittee. As the Coast Guard's Director of Prevention Policy, my first reaction to the news from New Orleans on the morning of July 23rd was to ask how such an accident could happen. My next reaction was to ask appropriate people from both the Government and the industry to make sure it doesn't happen again. After speaking to the NTSB and the Eighth Coast Guard District, I endorsed doing a district formal marine board of investigation. Coast Guard investigators, joined by NTSB investigators, began collecting evidence, designating parties, and preparing for the public hearing. The chairman of the NTSB and the Eighth Coast Guard District commander held a press conference on the afternoon of July 23rd to assure the public that appropriate investigation actions were being taken. Follow-up press releases were disseminated on July 28th and August 2nd, with initial findings and release of the VTS radio coms with Mel Oliver and Tintomara, the ship that was involved. In the meantime, Coast Guard marine safety officers systematically visited each of the 18 other DRD vessels to ensure they were properly manned with appropriate licensed personnel and crew. The Marine Board hearing began on August 12th and recessed on August 14th after interviewing four witnesses and entering 62 documents into evidence. Successive hurricanes have intervened since then. The hearing is scheduled to resume on October 9th and expects as many as 32 witnesses and many more documents. On September 5th, following two meetings we had with the American Waterways Operators, we released the Unlicensed to Drive Safety Alert. This is a strong reminder disseminated to the towing industry about proper manning and licensing. Admiral Allen has directed Coast Guard operations planners to prepare a targeted safety enforcement campaign for licensing, manning, navigation, and safety equipment. We have currently been boarding about 1500 towing vessels annually. Thursday of this week, I will meet with the Towing Safety Advisory Committee, TSAC, to review the actions taken so far and hear their recommendations for other potential actions. My experience is that accidents like the collision that occurred in New Orleans on the 23rd don't just happen. Numerous interventions or safety factors could have prevented the accident. It wasn't a natural disaster, it was manmade. Things like oversight, leadership, professionalism, standards, and even work hours and conditions can make a difference. This Subcommittee has provided good oversight in recent legislation. First, the United State Coast Guard is authorized to require licenses for every towing vessel at least 26 feet in length. In 2001, we overhauled the towing vessel operators licenses. We phased out the old operator of uninspected towing vessel, OUTV, license and created a master of towing vessel license that requires a progression from apprentice to mate and a minimum of four years experience. We continue to improve upon these regulations, and just this month we published an amendment to give credit for approved training courses and experience as a master of inspected vessels. Second, the Coast Guard is authorized to proscribe hours of service aboard towing vessels in accordance with Section 409 of the Coast Guard and Marine Transportation Act of 2004. The Coast Guard has provided crew endurance management training for over 2500 mariners and has published a Navigation and Inspection Circular. This is a risk-based service hour management program and is part of a safety management system for a company. The Circular is a stepping stone for towing vessel industry management to be prepared for the regulations anticipated in accordance with Section 409. Third, the Coast Guard is authorized to inspect and certify towing vessels in accordance with Section 415 of the CG&MT Act of 2004. This massive undertaking requires a new subchapter in the Code of Federal Regulations and additional manpower in nearly every Coast Guard sector to enforce it. It is comparable in scale to the small passenger vessel inspection rulemaking of 1956. The Coast Guard has been working very closely with the Towing Safety Advisory Committee (TSAC) and expects to publish the notice of proposed rulemaking in 2009. The rule will require each company to have a safety management system, including crew endurance management. It will allow for third- party reports, documents, and records to be used during the certification process in addition to periodic vessel inspections by Coast Guard officers. Mr. Chairman and Members of the Subcommittee, thank you very much for this hearing. I look forward to answering your questions. Mr. Cummings. Thank you very much. Mr. David Westerholm. Mr. Westerholm. Thank you, Mr. Chairman and Members of the Subcommittee for the opportunity to testify on the National Oceanic and Atmospheric Administration's role in the response to the July 23rd, 2008 oil spill on the lower Mississippi River. I am Dave Westerholm, NOAA's Director of the Office of Response and Restoration within the Department of Commerce. I appreciate this opportunity to highlight the critical contributions provided by NOAA during spills. When oil spills into our coastal and inland waters, it can harm people and the environment, and cause widespread economic effects. The best remedy is to prevent oil spills. But when a spill does occur, we must act quickly and effectively to mitigate any harmful effects and restore injured resources. An effective response based on solid science and smart decision- making reduces environment, social, and economic impacts, as well as clean-up costs. To ensure a quick and effective response, we must remain prepared for spills by maintaining adequate response capacity and capabilities. NOAA provides scientific support coordinators who lead a team of NOAA specialists to assist the United States Coast Guard in its role as Federal On-Scene Coordinator. This scientific coordination is critical, and through experience, expertise, and state-of-the-art technology, NOAA forecasts the movement and behavior of spilled oil, evaluates the risk to resources, and recommends protection priorities and appropriate cleanup actions. I would also like to mention and thank the incident meteorologists, our colleagues at NOAA's National Weather Service, who provide on-site weather support throughout spill events. With respect to the July spill, my office was notified shortly after the collision and we provided our first spill forecast predictions to the unified command within two and a half hours of the event. Over the following month, we provided 24x7 scientific support, which included daily or twice daily trajectories of the spilled oil, information management, overflight observations, weather and river flow forecasts, and shoreline assessment. Over 200 miles of river shoreline were surveyed to support cleanup activities and we quickly mobilized our damage assessment and restoration teams to begin collecting data and a variety of environmental samples to initiate restoration planning as a natural resource trustee. In addition to harming wildlife, wetlands, and other coastal habitats, this incident resulted in significant economic disruption, including extensive waterway closures, closure of municipal and industrial water intakes, and interference with critical channel dredging operations. The NOAA scientific support team helped minimize these disruptions and coordinated many of these environmental issues for the unified command, including technical issues associated with the fate of and behavior of the oil, shoreline and ship cleanup strategies, protection of water intakes, and contamination of dredge spoils. NOAA will continue to assist as needed until shoreline cleanup is completed and the response is demobilized. But while the operation response phase is winding down, NOAA's role as a natural resource trustee under the Oil Pollution Act will continue to ensure that the natural resources harmed by this spill are restored. To do this, NOAA is working with other Federal and State resource agencies and with representatives of the responsible party in a cooperative process to develop a restoration plan. The collision of a chemical tanker and a fuel barge in one of the Nation's most critical waterways is a reminder that accidents will undoubtedly continue to occur, despite the many safeguards and improvements that have been put in place since the passage of the Oil Pollution Act. In the past six weeks since this incident, NOAA has responded to two dozen other spills around the Country. Although the best remedy is to prevent oil spills, despite our prevention efforts, the huge volumes of oil moving through our waterways makes spills a statistical certainty. Once oil is released into the marine environment, the best that we can do is quickly and effectively mitigate and restore any harmful effects. Therefore, responders must be equipped with sufficient capacity and capabilities to address this challenge. Continuous training, exercises, and investments in high-priority response-related research and development will ensure that the Nation's response to these incidents remains effective. In conclusion, I want to thank you for the opportunity to discuss NOAA's important role in oil spill preparedness, response, and restoration. NOAA's suite of scientific products and services and expertise of our personnel are critical in mitigating harm, providing information for the allocation of response assets, restoring adverse effects on natural resources, and informing overall response decision-making. At this time, I would be happy to answer any questions that you may have. Mr. Cummings. I want to thank all of you for your testimony. I am just going to have a few questions. Rear Admiral Watson, I want you to, if you can, explain to me how a firm that sank a boat that was not operated by a properly licensed master could then be operating another boat less than two weeks later without a properly licensed master on board, and that, too, with a history of operating vessels without properly licensed personnel. Does this situation suggest to you that this firm and its personnel didn't think that there was much risk in operating without properly licensed personnel, as they were unlikely to be caught? I mean, what did you take of that? You made some very strong statements in your opening about how these things just don't happen, and I am just wondering what your view is on that and how do you see the Coast Guard being able to affect that utter disregard for not only the rules, but for the safety of people who are using our waterways. Admiral Watson. Yes, sir. A couple of thoughts come to mind. First of all, we are investigating both incidents at this time. With only a two-week separation, the two incidents are going to be analyzed together, and we are asking the same questions. In the interim, we are going to be initiating a targeted enforcement program that will assume that perhaps there is some need for particular enforcement on these vessels for licensing. At the time, after the first incident involving DRD, we didn't have that kind of an operation in effect. Rather, we did more like random law enforcement, random boardings. We do about 1500 of those a year. This targeting thing would be focused on the results of performance by various companies, by perhaps various specific captains from time to time, and the casualty data that we get to see if there are trends that need to be particularly attended to in terms of enforcement. Mr. Cummings. In other words, you are saying that if you see some type of history developing--and I guess history could be one incident--that those folks may come under a little more scrutiny than they might normally come under, is that right? Is that what you are saying? Is that part of what this initiative is about? Admiral Watson. Yes, sir. We have had great success in our foreign vessel boarding program, our port State control program, in which we actually target foreign flag vessels that come into our ports based on the information that we have, their history, any information we can use that is available from the private sector--we use that quite often--obviously, past casualty experience, and even some targeting based on the last ports of call and so on. So we have not applied that kind of a targeting system on the inland rivers, but we have got a track record of finding success for that and plan to do it in this case. Mr. Cummings. Now, you said some things in particular that really concern me, and I want to see if the Committee can get some clarity on this. Section 3307 of Title 46 states that ``Each vessel subject to inspection under this part shall undergo an initial inspection for certification before being put into service. After being put into service, any other vessel shall be inspected at least once every five years.'' Therefore, a towing vessel must be inspected by the Coast Guard or personnel classification society personnel under Section 3316 at least once every five years. Your statement appears to indicate that the Coast Guard or class society personnel--and this is where I am going--do not need to physically board and inspect a vessel if the owner of the vessel has passed a safety management audit. That position does not seem to conform with the statute. And one thing we have learned from this accident is that the Coast Guard personnel need to be on every towing vessel more often, not less. So my question is this: does the Coast Guard agree that the law requires that the Coast Guard or class society personnel board a towing vessel to conduct an initial inspection and an additional inspection every five years to ensure it is in compliance with all statutory and regulatory requirements pertaining to the inspection of that vehicle? Admiral Watson. Sir, the regulations, when they are promulgated, will comply with the law. The concept of using third parties is going to be incorporated into those regulations, and we anticipate that there will be examinations and audits much more often on these inspected vessels than every five years, but the Coast Guard will be attending to those vessels at least once every five years. Mr. Cummings. Now, does that include boarding? Admiral Watson. We separate law enforcement boardings from compliance inspections and exams, so our compliance activities are done by a qualified marine inspector who is actually comparing the material conditions and the operating information that is available to them on board to our regulations in a periodic exam. These are scheduled inspections. The boarding officers which Congressman Taylor referred to, they are typically on our small boats; they are coming at odd times, unexpected. They are going to be picking and choosing which vessels they board based on their experience and, in the case of a targeted boarding program, on intelligence, if you will, that we will provide them from our command center. Mr. Cummings. Let me just ask you about this rulemaking. The Coast Guard has been administering the International Safety Management System for over a decade. Is it difficult for the Coast Guard to develop a safety management system for towing vessels and, if so, what makes it so difficult? Admiral Watson. Yes, sir. That has been a challenge. We are dealing with a population which is tremendously diverse, from very small business owners to very large companies like ACL and Kirby and Ingram, and there is a lot of variation on how you would implement a safety management system which applies to a company when you look across that diversity. So it has been a challenging thing. We have gotten a lot of support and assistance from our Towing Safety Advisory Council, but it has taken some time and I know that everyone wants to get these regs out. But that has been a big issue for us, sir. Mr. Cummings. So the question becomes will we or others be sitting in this Committee five years from now having this same discussion about getting out regulations, and the question is, while it may be difficult, is there anything that the Congress can do to push this process along? There are a lot of difficult circumstances that happen every day. I mean, if you are telling me that the difficulty leads to the impossibility of these issues being resolved in a short period of time, I need to understand that. Anything short of that, I would like to know what it is that we can do to move the process, because I am so afraid that we will--it is like there was an old song that said you got me going in circles, around and around we go. It is like a merry-go-round and we just keep going around and around, and in the meantime things do happen, accidents do happen. So I am just trying to figure out--and I am not trying to beat up on you, I am just trying to have a very practical answer to my question, because, again, this is our watch, yours and ours, and we want to do what we can to resolve the issue. Other than that, we will be here 10 years from now. Well, we may not be here, but other people will be here discussing this and, sadly, by then, several other accidents may have happened. So what can we do? Admiral Watson. Yes, sir. I would like to go back to your opening statement, where you talked about motivation. I don't think any group of people could be more motivated to implement prevention type regulations and to have periodic inspections and all those things that we do that prevent marine casualties from occurring than the Coast Guard. We have to clean up these messes. Sometimes there are people that are killed, sometimes injured; we have to notify people of lost ones. We are motivated to get these things done if they are going to improve safety. So there is no doubt that you are dealing with motivated people. Now, one of the things that you can do is what you are doing right now, and that is having a hearing and bringing attention to a particular segment that we are working on, and certainly that provides additional motivation. Not that we haven't been working on this, but we will redouble our efforts and try to get these regulations out as soon as possible. A significant factor, of course, is manpower for the enforcement. The budget request for 2009 has those personnel built into that budget. We are hopeful that the Congress will see fit to pass that budget and include those personnel that we need to get trained up so that, when these regulations hit the street, we will have the qualified personnel out there to implement them. Mr. Cummings. Now, that was a great answer, but you left off one piece I think you won't find not one single person, Member of this Subcommittee, and probably the Full Committee, that would not be for the resources that you talked about. Keep in mind, I talked about resources and motivation, and I did not want to imply that I did not think that the Coast Guard did not have the motivation. But I also talked about resources, and the resources now I am asking about is do we need more resources to get the regulations done so that we will even need the personnel to enforce the regulations? Because I think you are going to hear some testimony coming up later that there are question marks as to whether the Coast Guard is able to enforce policies that make our waterways safe. And if we don't get the regulations, we can't get to the enforcement, and I think that is the key and that is what I am asking about. What do we need to get the regulations done? You follow me? Admiral Watson. Yes, sir. You are probably familiar, we have a big backlog of regulations projects. We still have regulations that haven't been completed that were authorized in OPA 90, and that has snowballed because more and more authorities have been granted the Coast Guard to do different things. This project, towing vessel safety regulations, has definitely risen to the top of the heap, and last year, in our appropriation for 2008, we were authorized 31 new positions to work in our Standards Division to write regulations. We have had some challenges hiring the economists that are necessary to do all of that background work that needs to be done to satisfy the Administrative Procedures Act, which you have to do in order to push through regulations. But I think that that problem is behind us now. We have got those positions, we have hired those people. We have done a lot of the technical work that was necessary to do in conjunction with the TSAC. The economic work is now in full swing and we hope to get these regulations--we will get these regulations out in 2009. Mr. Cummings. Thank you very much. Now, I want you to say that sentence one more time. Say that sentence one more time, because I want to make sure it is on the record. Say that again, the last sentence. You didn't say we might, you said we will what? Admiral Watson. Let me clarify. We will get out the notice of proposed rulemaking in 2009. Mr. Cummings. Mr. LaTourette. Mr. LaTourette. Thank you very much, Mr. Chairman. Just to my good friend, the Chairman, just so my opening statement wasn't misunderstood, my view is we can have the best regulations in the world, the safest ships in the world, the best inspections in the world, just like we can with cars and traffic safety, but when a 13-year-old decides to get behind the wheel of the car, there is not much we can do about it, and that, at the end of the day, is what occurred in this situation. He wasn't 13, but he didn't have a license. Admiral, as a result of the Coast Guard's ongoing investigation, do you expect that there will be referrals to the Department of Justice as a result of the conduct of some in this spill? Admiral Watson. Well, I really don't like to speculate on that. What I will assure you is that this will be a thorough investigation. That is why there is a formal Marine Board of Investigation. That also provides transparency to the collection of witness testimony and so on. At the end of that process, the Board of Investigation will not only make a conclusion as to the cause of the casualty, but they will make a recommendation to the District Commander on any further actions, and that could include administrative procedures against a licensed personnel or multiple licensed personnel, or it could include, if there is evidence of a crime, a referral to the Justice Department, the U.S. Attorney. Mr. LaTourette. But let me ask you this, because I am kind of a simple guy. Is driving a boat without a licensed captain and without the proper credentials, is it a crime today? The Chairman is asking you what we need to do. If we haven't made it a crime, do we need to make it a crime? Admiral Watson. Well, it is a violation of 46 C.F.R., which requires the company to ensure that you have a licensed master, and if you have gone beyond the limits of your license, you will be taken to a hearing with an administrative law judge to see if you should still hold that license as a responsible merchant marine. But I don't know about the crime part, sir, I really don't. Mr. LaTourette. I got that you can have bad things happen in your life, but can you go to jail? You don't think so, is that what you said? Admiral Watson. Sir, I don't know specifically what the criminal cite would be for that. Mr. LaTourette. Okay. Well, maybe, Chairman, we need to make it a crime. The drunk driver who causes an accident goes to jail. The guy who drives a boat and creates an oil spill should probably go to jail if they are not properly licensed and they have broken some regulation. We had a hearing a little while ago, Admiral, where the National Transportation Safety Board came before the Subcommittee and, I thought in one of the biggest power grabs in the world, attempted to tell us that they had legislation that would give NTSB primacy in Federal regulation of a maritime incident, and that was in the aftermath of the San Francisco spill that Ms. Richardson was talking about. Did NTSB decline to conduct an investigation into this spill? Admiral Watson. No, sir, not at all. Actually, NTSB would have been quite willing to investigate this casualty. As it turned out, we had initiated the formal Marine Board of Investigation before the NTSB board member, who was the chairman that day, arrived in New Orleans, so he worked it out with the District Commander and it was decided to go ahead with the Coast Guard's process. Now, one of the things coming out of the last hearing on that is that we should work out a new Memorandum of Understanding between us and this is, I think, going to be characteristic of how this MOU is going to be written. We are going to try to combine the best of both organizations' methods and experience, and even technologies for each marine casualty. We found that there are good things about NTSB's processes and procedures that can occur right up front in collecting evidence from onboard the vessels and so on, but that the Coast Guard Marine Board hearing, which also is a good thing in this kind of a case, is actually not part of an NTSB process, but provides a way for public hearings right in the beginning of a marine casualty to collect evidence from witnesses. And then both agencies can go and do their independent analysis and produce separate reports at the end, and that is how we plan to proceed with this particular casualty. Mr. LaTourette. So at the end of that rather lengthy answer, the fact of the matter is the system we have in place, subject to a new MOU, is working pretty well, would that be right? Admiral Watson. Yes, sir. I think that this case demonstrates that. Mr. LaTourette. Perfect. Last thing that I want to talk to you about, Admiral, is under the Oil Pollution Act of 1990, liability for removal costs and damages resulting from a release of oil rests with the responsible party, and the responsible party is defined, in the case of a vessel, any person owning, operating, or demise chartering a vessel. My question is, under the terms of a demise charter, does any or all liability remain with the vessel owner, as opposed to the entity that takes operational control of the vessel? What I am concerned about is that the way I read the Oil Pollution Act of 1990, it is both the owner and the operator that are responsible, and I am concerned that this demise charter is somehow a loophole that would relieve the owner of the vessel from participating in the liability. That ties into my whole set of concerns about the solvency of the Trust Fund. Admiral Watson. OPA 90 made it very clear to us and the responders who the responsible party is, and in this case it was ACL because they owned the barge and were in control of the oil. After all of the investigations and deliberations with the National Pollution Fund Center, there could be some shared liability between the owner and the operator, but I really can't comment on how those cases come out or specifically what OPA 90 directs in that area because it is sort of an after-the- face, behind-the-scenes issue as far as the Coast Guard is concerned, except for our National Pollution Fund Center. Mr. LaTourette. Could you just have somebody--but not today--take a look at that? My concern is that that demise charter technique is a way to offload somebody's responsibility. I am a big believer that everybody should be involved that is involved, but if there is some technique through this demise charter process that relieves somebody that should be participating in the cleanup, I would just like whatever the service's response to that is. [Coast Guard insert follows:] [GRAPHIC] [TIFF OMITTED] T5023.024 Mr. LaTourette. Mr. Westerholm, just so you don't feel ignored, your office, Response and Restoration, did you receive a reduced level of appropriations in this fiscal year than you had the year before? Mr. Westerholm. Yes, sir, we did. Since fiscal year 2004, we have had about a 30 percent reduction, and specifically in 2008 we had a base budget of $11.5 million, which was approximately $5.3 million below the fiscal year 2008 requested level. Mr. LaTourette. And has that had an impact in terms of the preparedness and response capability that that office has? Mr. Westerholm. It has. I think both the San Francisco spill and this most recent spill illustrated some of that and, briefly, it comes down to both capacity and capabilities that I mentioned earlier. The capacity is the number of people that we can bring to a spill or the number of simultaneous events that we can do at one time. In this case, we notice we did not have the capability to respond to two simultaneous major oil spills, and in the capability piece our modeling for subsurface oil, in particular in New Orleans, we had a great two-dimensional modeling for the surface oil which was going down the currents, but being a heavier oil, some of that was subsurface and we had not been able to beef up that capability. Mr. LaTourette. If this Congress is unable to complete its appropriations work in the next 14 days and there is a continuing resolution, you will be frozen at $11.5 million and those same limitations, you would expect, would apply? Mr. Westerholm. Yes, sir. Mr. LaTourette. Thank you. Thank you, Mr. Chairman. Mr. Cummings. Mr. Taylor. Mr. Taylor. Thank you, Mr. Chairman. I should have guessed that you would have prepared statements, so I am going to have to restate my questions again. What is the fine for operating a vessel of this size without a licensed operator? Second, I am curious whether or not the Coast Guard still conducts daily and nightly harbor patrols at Port New Orleans. I am curious whether or not the high price of fuel--because my memory is that fuel was peaking about then--did the high price of fuel cause the Coast Guard to curtail its operations around this time? Lastly, I am aware that there is a vessel traffic service in the New Orleans area. I am curious if your vessel traffic operator had issued any warnings to that vessel in the hours before this or even the days before that. Was there a pattern of reckless behavior by that vessel immediately before this that might have triggered someone's suspicions that an unlicensed person was operating it? Lastly, going back to Mr. LaTourette's question, I am aware that there is something called a Certificate of Financial Responsibility that tracks that cargo. Should that cargo end up in the water, you have got a paper trail as to who is going to pay the fine. Does the Certificate of Financial Responsibility also say who is going to put a licensed person on that vessel? Who is responsible for either supplying or, in this case, not supplying a licensed person on that vessel? And who pays the fine for that, would it be ACL, would it be the operator, would both be responsible? Admiral Watson. Yes, sir. I will those questions for you. I will start with your question about penalties. There is a civil penalty associated with the unlicensed being at the helm; it is a minimum of $2,000 per day, up to a maximum of $10,000. We also can issue and start suspension and revocation proceedings against that mariner to take away his license. Mr. Taylor. How about the firm that allowed this to happen? Admiral Watson. Likewise as well. Mr. Taylor. Who pays the fine, the firm, the operator, both? Admiral Watson. Both, sir. Mr. Taylor. Okay. Admiral Watson. That is the penalty side. As far as harbor patrols, we conduct weekly harbor patrols, so we don't do the daily ones as we had before. Fuel is not an issue on those; we have plenty of---- Mr. Taylor. Admiral, the reason I say that is I just happen to have witnessed a football game the other day that maybe you guys wouldn't want to remember. It happened at Kings Point, New York. But I did notice that the Kings Pointer has been tied up for some time because of the high cost of fuel. So I have got to believe that that is not unique to that institution. But you tell me that was not a factor in Coast Guard inspections? Admiral Watson. No, sir. Mr. Taylor. Okay. Admiral Watson. Next question about the Vessel Traffic Center, hours before the incident, there were no unusual maneuvering by the vessel; it was being loaded with fuel. It left the dock, proceeded across the river, headed upbound on the Mississippi River. Just moments before the collision was the unusual activity, and the Vessel Traffic Center was engaged, was putting out, trying to hail the vessel, unresponsive, and were very active in trying to advise and essentially tell that vessel what to do. They were also talking with the tank ship all the time, as well, as the collision unfolded. Mr. Taylor. Okay. Admiral Watson. And then the last question about the Certificate of Financial Responsibility, that particular towing vessel, that size, is not required to have one, and there is not tied to the manning issue at all. Mr. Taylor. Let's back up to that issue. I realize some of these questions are going to be geared towards the owner of the vessel, but going back to Mr. LaTourette's questions, it sure strikes me as strange that someone would rent at least a million dollar vessel for a dollar a day, then turn it back and pay that person to operate it for them. And we all learn from things that have happened and mistakes that have happened. Is the Coast Guard looking into the possibility that there is an unintended loophole in the law that encourages some firms to engage in this sort of behavior to either save money on insurance, on crewing costs? There has got to be something that would cause a company to do this transaction, and I am curious as to what you think it is and if you have made any recommendations to this Committee or to anyone in Congress as to try to close that loophole. Admiral Watson. Sir, the formal Marine Board of Investigation is set up to do those kinds of analyses and interview many, many more witnesses than we normally do for a marine casualty. This is an issue that is being asked; it is going to be investigated in connection with this particular casualty, and if it appears that this is a loophole, that report will be acted on up in Coast Guard Headquarters by policy makers there to commence whatever is necessary to fill that loophole. Mr. Taylor. Mr. Chairman, just one quick follow-up. I am curious, on the Certificate of Financial Responsibility, I am guessing that the barge had one, but the tow boat did not. Is that correct? You said that that vessel was not required by law to have one. Admiral Watson. Yes, the barge would have had a COFR, but the tow boat would not. It was over 300 tons. Mr. Taylor. Okay, so what size vessel, self-propelled vessel, would be required to have a Certificate of Financial Responsibility? Admiral Watson. It would be a 300 ton vessel is the minimum size to need a COFR, a Certificate of Financial Responsibility. Mr. Taylor. And as a matter of curiosity, does a Certificate of Financial Responsibility--I realize it covers this is who you are going to call and this is who you are going to fine if there is a spill. Does it also include crewing of the vessel with a properly licensed crew? Admiral Watson. No. A Certificate of Financial Responsibility is just a document that proves that the company that operates a vessel over 300 gross tons has insurance. Mr. Taylor. Okay. Thank you, Mr. Chairman. Mr. Cummings. Thank you. Mr. Coble. Mr. Coble. Thank you, Mr. Chairman. Mr. Chairman, as ofttimes the case, I am between Judiciary and Transportation, and today is no exception. I am sorry for my belated arrival. Admiral,--good to have you all with us, by the way--are the licensing problems discovered aboard the Mel Oliver an isolated incident or is it a common problem industry-wide? Admiral Watson. We looked at our numbers for the last five years and we found that there have been years where we have had as many as seven people discovered during random boardings who were operating a vessel with the wrong license. In the last year there were three. We have also looked at our casualty data and discovered that there have been licensing issues discovered in investigations of marine casualties, and I think the numbers there are on the order of one or two. So it is a concern and we haven't done any specific targeted investigations for this particular issue. We plan to, but the numbers haven't stuck out at us in the last five years. Mr. Coble. Thank you, sir. Walk us through, Admiral, if you will, the process of the inspection of towing vessel rulemaking has taken, A. I have been told that there has been a collaborative effort with industry, but I would like to ascertain the level of involvement and input. Admiral Watson. The industry has been very involved. We have got a committee, a workgroup that is subordinate to the Towing Safety Advisory Committee that has had over 100 different participants from across the industry, including labor and management and other government agencies, just a whole variety, and we have really made a strong effort to be inclusive in the process of drafting these regulations. Part of what we hope will be the benefit of that is when the proposed rule comes out, we hope that there won't be a huge number of comments that say we should rewrite those proposed rules; we hope we can go quickly to the final rule. Mr. Coble. I got you. How would the proposed transfer of primacy to NTSB impact the Coast Guard's capabilities to carry out investigations and to, therefore, enforce U.S. laws? Admiral Watson. Well, quite frankly, I haven't spent a lot of time considering that outcome, but I think it would have a dramatic effect. It would undermine our regulatory program because we wouldn't have our investigators working directly hand-in-hand with the inspectors and with the captain of the port. So I think it would significantly degrade our program. Mr. Coble. I am inclined to agree with that. Thank you, Admiral, Captain. I yield back, Mr. Chairman. Mr. Cummings. Mr. Oberstar. Mr. Oberstar. Thank you, Mr. Chairman, for holding this hearing on an extremely important subject matter that captivated the national attention. The underlying issues associated with this tragedy are also the subject matter of previous hearings of this Committee and action in reporting on our Coast Guard authorization bill. Had we been able to come to closure with the Senate in a conference on that legislation, perhaps we would be on the way to resolving some of these underlying problems of licensing and inspection and certification and supervision. In this case, the towing vessel operator was not properly licensed, was not authorized to operate a towing vessel without a licensed master in the wheelhouse, and without that supervision tragedy occurred. The Coast Guard has 100 notices of proposed rulemaking backlogged, in various stages of consideration, and the ones on towing vessels have been in the works for four years, in some cases. What is the problem? Is it a lack of personnel to process? Is it a lack of funding to carry forward with the rulemaking process? Are there glitches in the rulemaking process that have slowed this down? You have got over 5,000 towing vessels to inspect, at the same time putting a drain on the personnel resources of the Coast Guard. Our legislation would provide a significant increase in staffing standards for the Coast Guard, so that is not the Coast Guard's problem, it is our congressional problem, the Senate's problem. If we can't resolve that matter in this Congress, it will be one of the very first issues we do in the next Congress, but something we just need to do. Then the particular case here, the complexity of the operating circumstances, the several levels of chartering, bareboat charter, this and that, wet lease, dry lease. I make a comparison with aviation. When an airline contracts out its maintenance, the FAA regulations require that that maintenance--say, if it is Northwest Airlines contracting out to United Airlines or to a third party MRO supplier, that maintenance provider must conduct the work according to the airline's--in the examine case it would be Northwest's-- maintenance manual, performed exactly to the standards imposed. And Northwest, in the end, is responsible for whatever shortcomings or failures of the maintenance provider. What are the rules in maritime, when craft are chartered out in the manner of this very complex case? Admiral Watson. Sir, the rules for maritime is if there is a bareboat charter, only the vessel is transferred and the new company, the company receiving that vessel is responsible for manning and operating and maintaining the vessel in accordance with whatever the contract requirements are. In a case like this, typically there is an on-charter and then an off-charter survey that is done to assure the two companies that there weren't any damages and that sort of thing. The Coast Guard would hold the operator of the vessel responsible for all of the requirements of the Code of Federal Regulations. Mr. Oberstar. So in that situation, then, the owner of the vessel is ultimately responsible for any failure that occurred, as example in this case? Admiral Watson. Well, in this case, the vessel was owned by ACL and it was being operated by DRD. DRD, as the operator, is going to be responsible for the master and all of the systems that are required to be on that vessel. Mr. Oberstar. So ACL--and I have witnessed the legal maneuvering--is attempting to divest itself of any responsibility for DRD, is that correct, under the Oil Spill Liability Act and under existing Coast Guard regulations? Admiral Watson. Well, there are really two different systems going on here. Under the Oil Pollution Act of 1990, ACL is still the responsible party. But under the 46 C.F.R. rules for safe operation of a vessel, DRD is responsible because they are the operator. Mr. Oberstar. So if you are a shipper, how do you know who is going to be responsible for your product on board a vessel? How can you assure that your goods are going to be delivered safely to the marketplace and who are you going to hold responsible? And you, as the Coast Guard, how can you enforce such under such conflicting circumstances? Admiral Watson. Well, the Coast Guard has been doing this for many years. We don't really have a problem determining who is responsible for the vessel and its safe operation. Similarly, when the oil is in the water, OPA 90 has made that very simple for us to determine who is going to be responsible for cleaning up that oil, and that seems to be working pretty well. For the owner's cargo---- Mr. Oberstar. So in the circumstance of the New Orleans spill, ACL should then be responsible for DRD not having a properly licensed operator in the wheelhouse, correct? Admiral Watson. Yes, sir. What we have found since OPA 90 is that this situation has caused cargo owners and vessel charterers to have systems called vetting systems, where they have inspectors that work for their company or their association that very carefully vet these operators, and quite often they will change their mind before they enter into a business agreement based on these vetting inspections. That is pretty much the norm in the larger tanker industry these days. Mr. Oberstar. Well, we have in our possession--the reason I am pursuing all this is we have in our possession a letter from American Commercial Lines (ACL) to the Director of National Pollution Fund Center. It says ``Please be advised that the sinking of the barge 932 and any pollution which may have occurred as a result thereof occurred as a result of the sole act or omission and fault of one or more third parties for whom ACL is neither responsible nor liable so ACL denies your designation of it, ACL, as the responsible party.'' How can they do that? How can they wash their hands of this? Admiral Watson. I can't comment on what the outcome of that request to the National Pollution Fund Center is going to be, I don't know how they will handle that letter, sir. Mr. Oberstar. I am getting at there shouldn't be an escape hatch for these operators; they should be responsible for the entity to whom they charter. Right? Admiral Watson. Sir, that would go a little beyond my knowledge of the details of OPA 90, sir. Mr. Taylor. Mr. Chairman, would you yield? Mr. Oberstar. I yield to the gentleman. Mr. Taylor. Thank you very much, Mr. Chairman. Admiral, I understand that, at the end of the day, a court will make this determination. I think what the Chairman is asking you, though, is since you are representing the Coast Guard today, what is the Coast Guard's interpretation of this law. After all, you have to have a basic understanding of the law to enforce it. So how does the Coast Guard view this, keeping in mind that, at the end of the day, a judge is going to make the final call? Mr. Oberstar. I thank the gentleman for reframing my question. You did it very well. Admiral Watson. Our interpretation is ACL is the responsible party. We held them responsible, in accordance with OPA 90, to clean up all the oil, and there was no question as to their responsibility to do that. If they had refused, we would have opened the Fund wide open and done the cleanup ourselves, and they would have had to deal with potentially three times the cost of that spill. That is what OPA 90 says. How this gets sorted out, another defense to liability is an act of God. There are always people that are faced with big cleanup costs that are going to try to find ways to reduce that liability, and we don't worry about that at this stage in the game, sir. Mr. Oberstar. But this industry is attempting to police itself and working diligently at it, and there are bad actors in a great many sectors of our economy, and I know of at least one, maybe two--maybe three, now that I think it--notices sent out by vessel operators that they will not charter to--first, one says we will not charter out. Your goods are shipped on our lines and we are going to be responsible for them, we are not going to contract out. Others have said we will subcontract only where we have a certificated operator that the master in the wheelhouse is qualified, is licensed, is certified, and we will take responsibility for that. But maybe we need to reinforce what the industry or some elements of the industry are attempting to do with change in the law, strengthen that responsibility so that we have something more in line with what I described in the aviation sector. Do you see any impediment to that? Admiral Watson. I don't see any impediment, sir. Mr. Oberstar. Thank you. How is it possible that a master could be away from a towing vessel for such an extended period of time without the firm who is responsible for operation of the vessel knowing the situation and making a good faith effort to manage its vessels? How can that be? What can be done in the ordinary course of operation to assure that the master of the vessel is not abandoning his post? Admiral Watson. Well, the purpose of our formal Board of Investigation is to ask that same question and get an answer to it. I am sure that, once they have an answer, they will provide a conclusion and a recommendation, and we will try to act on that up in the policy-making section of Coast Guard Headquarters. I don't have anything in mind to answer your question right now, sir. It is going to be a challenge for us to have that kind of visibility of the inner workings of any particular company. Mr. Oberstar. I have held for many years the principle that safety begins in the corporate boardroom, it doesn't begin in the Coast Guard or the FAA or the Federal Railroad Administration or the National Transportation Safety Board. Those agencies are there to protect the public interest, and when the private sector fails in its responsibility, that is, to live up to its own standards, or fails to measure up to the standards set by government safety agencies, then the government has to take action. Perhaps we have to await your board of inquiry to understand more about the complexities of this situation, but in these complex chartering arrangements, it occurs to me that we need to strengthen Coast Guard law and have cleaner, straighter lines of authority and oversight of these operations. Perhaps you can come back and answer my earlier question about the number of rulemakings that are in the pipeline and when you think you will be able to proceed on those. Admiral Watson. Sir, I promised Chairman Cummings that we will have the Notice of Proposed Rulemaking out for towing vessel safety regs in 2009. Mr. Oberstar. When? Admiral Watson. Before the end of the year, sir, but I am shooting for the spring. Mr. Oberstar. Spring is a long time. Before the shipping season? Admiral Watson. Yes, sir. Mr. Oberstar. All right. Mr. Chairman, I will withhold. I have other questions. I have to attend to another transportation meeting and I will return to the hearing. Mr. Cummings. Thank you very much, Mr. Chairman. Ms. Richardson. Ms. Richardson. Yes, thank you, Mr. Chairman. Did I understand you correctly to say that the towing vessels are only inspected approximately every three years or every five years? Which one is it? Admiral Watson. The Authorization Act of 2004 established a five-year Coast Guard presence inspection. These vessels are not actually inspected yet because we haven't promulgated the regulations. Ms. Richardson. Do you think that is sufficient? Admiral Watson. In combination with the safe management system and third-party inspections, I believe this will be the right mechanism to ensure safety on towing vessels. Ms. Richardson. If that is the case, why is it that the American Waterways--which it is my understanding is a trade association of towing vessels, tugboats, and barge industry-- that according to the AWO, DRD Towing underwent its last audit on or about May 17, 2008. DRD failed the audit because it did not have adequate documents to prove ongoing compliance with the requirements of the responsible carrier program. Although AWO indicates that the auditor that assessed DRD found that the firm met the required policies and procedures in place at the time of the audit, they still were inadequate in some of the other areas. Finally, it says DRD failed to provide the additional information and its membership in AWO was terminated. To what degree do you work with AWO? Admiral Watson. We have a partnership with the American Waterways Operators; we have been working with them for many, many years. They were our original partnership and that led to the establishment of the Responsible Carriers Program. Ms. Richardson. So if AWO, back on May 17th, found that they failed the audit, did you have any process in place to work with your partners to then follow up and see what was happening, especially since this accident happened less than 90 days later? Admiral Watson. No. Ms. Richardson. Okay, what are you going to do to do that? Admiral Watson. We have been in discussions since this Mel Oliver case on the 23rd of July, and we hope to use information flow from the RCP program, potentially, in our targeting efforts to do law enforcement. Ms. Richardson. Okay, potentially or we are? Because, according to my notes, a civil fine that could be applied in this case of $25,000 for a violation, it cost the local economy--which Mr. Taylor represents, $275 million per day. So are we potentially or are we going to do? Because this is costing us a lot here. Admiral Watson. I understand. The information from Responsible Carriers Program is owned by the American Waterways Operators and the companies involved there. That would be up to those companies and the American Waterways Operators association to share that information with the Coast Guard. Ms. Richardson. Okay, but you just said to me that they were one of your originating partners. So if they are one of your originating partners, do you have the full intention of sitting down with them and maybe establishing a process where you can share information so we can avoid situations like this? Admiral Watson. Yes. Ms. Richardson. Okay. My second question is there were 85 violations of having unlicensed operators. Are there any companies that had more than one, such as DRD? Admiral Watson. I will have to get back to you on that one. I don't know. [Information follows:] [GRAPHIC] [TIFF OMITTED] T5023.025 Ms. Richardson. And getting back to what some of my colleagues asked, have you thought about having a zero tolerance policy? In California, where I represent, if a kid brings a knife or a gun to school, and if they do that once, it is called zero tolerance. It means, if you do it once, you don't come back to that school again. Have you thought about having a zero tolerance policy that if a company, given the severity of what we are talking about, $275 million a day that it is costing us? Some of the questions you have heard from my colleagues is, is the process sufficient; should the laws be changed. Mr. LaTourette said should a person go to jail, which I think that they should. So what recommendations have you put in place for this Committee or for the appropriate body to implement some sort of zero tolerance or some other policy that would avoid this situation from happening in the future? Admiral Watson. We don't have that recommendation to offer at this point. Our process would start with the marine casualty investigation itself, which would determine the facts, and the investigating team would make conclusions and then they typically would offer recommendations, which may include such a recommendation, which we will then act on. Ms. Richardson. My time has now expired. Are you willing to work with this Committee to give us recommendations or advise us on how we could implement stronger punishment, I guess is the way to put it? Mr. LaTourette suggested, potentially, if a person is driving a vehicle. In my opinion, how is this any different than if a person is driving a car, they do a DUI and they kill somebody? This is killing our environment. We need your recommendations in conjunction with this Committee so we can implement something that will really, in fact, deter companies from having someone drive a vessel and cause this type of damage. Admiral Watson. Yes, absolutely. We work with this Committee. I think we have a long history of sharing these recommendations with the Committee, as well as NTSB providing recommendations, and we would hope that the Committee would continue to work with us on these recommendations where it is appropriate for the Committee to act. Ms. Richardson. Thank you, Mr. Chairman, for giving me another 10 seconds. I heard Mr. LaTourette ask very specifically the question about are the violations or the punishment, or whatever is in place, is it sufficient; how do we need to change it, etc. Are you prepared to come back and give this Committee specific examples of recommendations of what we could do, either us recommending to another body or us doing through legislation? Are you prepared to assist us with giving us those recommendations, yes or no? Admiral Watson. Yes. Ms. Richardson. Thank you very much. Thank you, Mr. Chairman. Mr. Cummings. Just two quick questions. As part of the inspection process, the Coast Guard will be required to set manning levels for inspected vessels. Currently, on voyages lasting longer than 12 hours, a towing vessel must have two licensed individuals onboard, is that correct? Admiral Watson. Yes, sir. Mr. Cummings. However, neither individual is allowed to work more than 12 hours, is that correct? Admiral Watson. Yes, sir. Mr. Cummings. So if they work any overlapping time, one is violating the law, is that not the case? Admiral Watson. Yes, sir. Mr. Cummings. Okay. Is that an ideal working situation, do you think, Rear Admiral? Admiral Watson. Well, that has been a topic that we have been looking at since 2004. We have done some pilot programs. We are going to address that in the proposed rulemaking in response to the authorization that requires us to look at watch standing and service time on board a vessel. There are a lot of different factors involved with the ultimate safety question, and I can't speculate as to what the conclusion is going to be as far as what is going to be in the regulations on that, sir. Mr. Cummings. Additionally, if a boat is in 24 hour operation, at least one of the licensed individuals must be on watch at all times in the wheelhouse, is that correct? Admiral Watson. Yes. Mr. Cummings. And neither can work more than 12 hours, is that correct? Admiral Watson. That is correct. Mr. Cummings. Are there any other duties that either licensed individual would have to attend to besides piloting the vessel? Admiral Watson. Well, they would typically have some administrative duties, and quite often those duties can be done in the pilot house. Mr. Cummings. If so, how can either individual attend to them without either leaving the wheelhouse or violating the 12 hour rule? Based on what you just said. Admiral Watson. Well, we know that some administrative duties can be done during the 12 hour watch, so that when they are finished that watch, there are no other duties that need to be done. But we are continuing to look at that and we need to provide some guidance, I think, through our regulatory process on how to keep this violation of the law from occurring. Mr. Cummings. As I was listening to Mr. Taylor's questions and Ms. Richardson's and Mr. LaTourette's, I thought about the many discussions that I have had with the Coast Guard with regard to drug seizures, and I asked the question, well, how do these guys--they purchase these boats, the ones that they operate under the water and they do all kinds of things to get around the Coast Guard, and one of the things that has been said to me over and over again by the Coast Guard--and, by the way, the Coast Guard has done a great job with regard to drug seizures. I understand we just had a major seizure just recently. Congratulations on that. But they said, well, these guys look at this as a tax. In other words, they realize that they are going to try to get as much drugs in the United States as they can, and they know, if you are going to get caught and they are going to spend this money, but it is part of doing business. As I listened to the questions, I am wondering whether there are some folks that go out there saying, what the hell, this is just part of the process. If we get caught, we get caught, no big deal. And I hate to say that, but when you think about it, the fact that you put somebody out there in the water who is not properly licensed--and I am going back to what Mr. LaTourette was talking about with regard to these prison sentences--you have to really wonder what they are thinking. They must see some advantage--now going to Mr. Taylor's question--some advantage to doing things the wrong way. Then I look at a situation like ballast water. With ballast water, we have got almost the entire industry, everybody, everybody saying we need to do something about this because we are all concerned about our waterways; we are concerned about these species invading our waterways. But I don't necessarily feel the same kind of enthusiasm about this kind of thing, which is just, to me, as significant, and I am just wondering, as we close out, because it sounds like there has been a call for some stricter rules, some stricter enforcement. I just want to know your opinion of all this, what your feelings are. Admiral Watson. First of all, I believe we are dealing with professionals here, and my approach is to start with using that appeal to our advantage. People have to go through a lot of study and effort, and they are going to sea, really, in the service of all the rest of us to provide this means of transportation. They should be paid well for that and they should feel that it is just not worth it to take a shortcut, because they would lose their future earnings and they would be losing profession. I think that is the answer to this. We have to hold these mariners to a high standard and we have to show them a lot of respect for what they do, and we have to encourage the companies to show that similar respect and support their needs when they are doing their duty as professional mariners. Mr. Cummings. Now, in fairness, in fairness, I must say that, in my discussions with Mr. Allegretti of AWO, I get the impression that we may just have a few bad apples and a whole bunch of people who are really trying to do it right. But, at the same time, the few bad apples can cause millions of dollars worth of damage and can tarnish the reputation of the folks that Mr. Allegretti deals with on a daily basis who are trying to do it right. It is interesting that AWO did an audit and these folks failed the audit. Interesting. Then the question becomes when they go to a professional organization and fail the audit, and they are still out there, then it seems to be some kind of gap that we need to close, because the professionals--the kind of people that you just talked about--who have earned this great reputation, this is what they do every day. They give it their best. They want to see everything go right. They don't want people out there on the water that are failing to do what they are supposed to do. So they set up the mechanisms to check these folks out, they fail, but they are not an enforcement agency. So then the Coast Guard comes in and says we have got to--I think if there are holes, we have got to fill those holes. Do you follow me? Admiral Watson. Yes, sir. I think the two ways to fill the holes is perhaps some more information sharing between the industry and the Coast Guard when there is indications that there are weaknesses there through the processes that they have in place and then, secondarily, getting these rules out, turning these vessels into inspected, certificated vessels, where we will have much more of a presence. Mr. Cummings. Thank you. Mr. LaTourette. Mr. LaTourette. Thank you, Mr. Chairman. I will try to be brief. Captain Stroh, I found, I think, in the code the fines that you were talking about. I will just ask you if you have an opinion, either you or the Admiral. Title 46, Section 2302, subparagraph (b) indicates that a person operating a vessel in a grossly negligent manner--that then goes on to do other things--commits a Class A misdemeanor, for which I assume you can go to jail. Does the service have an opinion as to whether or not operating a vessel without a license meets the threshold of gross negligence? That act alone. Captain Stroh. Well, my comments would follow Admiral Watson's comments, that part of the investigation, if the investigation shows that there was perhaps some gross negligence, then that recommendation would go to Admiral Whitehead and he could act on it. Mr. LaTourette. No, I got that. I think my question is more specific than that. Gross negligence means you are drunk, you are driving the boat and not paying any attention. But if all the evidence is that this person operated the boat when he wasn't supposed to because he didn't have the proper license, do you have an opinion as to whether or not that rises to the level of gross negligence? Captain Stroh. I care not to share that opinion until policy comes out that helps clarify that. Mr. LaTourette. All right, I got you. Mr. Chairman, just on that, as we are always looking for things to do, I would maybe ask that we consider an amendment to Title 46, Section 2302, subparagraph (b) to indicate in there that operating without a license is in fact gross negligence. And to go to Mr. Oberstar, the Chairman's point, because sometimes you are going to find a mariner who has been forced to do it. He says, I am not doing it, I don't have a license. Okay, you like your job? You drive the boat. That the Chairman considers language that says a person operating a boat without a license is considered to be grossly negligent, and a person authorizing or ordering the person as well. A Class A misdemeanor, I think, is six months in jail, maybe $1,000 fine. My personal view is to prevent--if this is the proximate cause of this collision, that you had a guy not knowing what he was doing and he wasn't properly licensed, I think six months in jail for he and the person that ordered him to do it is not an unreasonable penalty. But, anyway, I would ask you to consider that and thank you for the time, and I yield back my time. Mr. Cummings. First of all, I don't think what you just said--I have to look at it a little more carefully, but I don't think that is unreasonable. As I said from the very beginning, we have to figure out how--we can't just make excuses, we have to try to address these issues as best we can. At the same time, you and I have had many discussions about overkill, and I don't think that this is overkill, by the way. I just think that we have got to look at these matters very carefully and try to figure out, okay, does this work. Based upon everything that is on my mind right now, I am in total agreement with you. I think we have got to also look at the master who leaves the boat. We might want to take a look at that, too. And I would urge the witnesses who are going to be coming up next to comment on what Mr. LaTourette has said. You may have your own opinions on that and we would love to hear what they might be. If any of you all have an opinion on what he just said, we welcome what you might want to say. I am not asking you to, but, if you do, we would like to hear it. Admiral Watson. Sir, harping back to my point about the profession, you know, attorneys are professionals, doctors are professionals, and somewhere you have got to find the line between the system that holds the person accountable for their profession and the criminal justice system. I think you want to be very careful and deliberate if you choose to move that line and the signal that that might send. I am an advocate of doing things that will enhance the profession, because I think that that is a good thing for all of us in the maritime community. But under certain circumstances--and we already have a line there: if a person is drunk, if they are taking drugs, even there is criminality in killing wildlife with oil that you spill when you have an accident. So there are plenty of statutes for finding people in violation that causes them to serve in violation of a crime. I think we have one for extremely gross negligence, and we ought to just take a real close look at the existing law before we make changes. Mr. LaTourette. Would the Chairman yield to me? Mr. Cummings. I will yield. Mr. LaTourette. Thank you. Admiral, I agree with you, I don't think we should make up new crimes. Before this job I was a county prosecuting attorney, and in Ohio it is against the law to drive drunk, it is against the law to drive with a suspended license, and it is against the law to drive without a license, and you go to jail for it. It is not putting somebody in a stock. It is not putting them in prison for years and years and years. We are talking about a slight deterrent of maybe six months and a $1,000 fine to keep them from spilling 300,000 gallons of oil when maybe, mercifully, in my mind, there shouldn't be a difference between the guy that kills a duck with oil and the guy that doesn't kill a duck with oil. I mean, if the oil is spilled, it shouldn't be dependent upon where that oil went as to whether or not this person goes to jail. I thank the Chairman. Mr. Cummings. I would think, too, that a judge would have certain discretion if there are some mitigating circumstances. But I have got to tell you that I agree with Mr. LaTourette. In my other life, I used to represent lawyers who got in trouble, and he could be the greatest lawyer in the world, but if he went out there and really screwed up and did something that was really, really bad, he had a problem. I would think that the industry--and the reason why I drew the comparison with the way the industry deals with ballast water is because I get the impression that everybody thinks that this is the thing that is best for the industry. If somebody goes out there who is not licensed, the question, first of all, becomes if we are going to have a licensing process, why have it if people are just going to be able to go out there without a license and do their thing? There is a purpose for that licensing process, and the purpose is to make sure that folks who get out on our waterways are operating vessels safely and are not putting others in danger, and in this case not polluting our waterways. I could go on and on. So it just seems to me that this is not an unreasonable solution to a problem. Again, I think we have to be very careful, but we don't want to have these holes, these gaps. Obviously, there are some bad apples in this bunch that see the gap, and they are going through it, I mean, big time. One of the things that I say to my staff when I see an error in a memo or whatever, you know what I say to them? I say, look, I see this error. And they say, well, gee, Congressman, you shouldn't be upset with us about just one error. I say, what I worry about is what I don't see. That is what I worry about. So what I am saying to you is there is probably a lot going on that we don't even know about, but certainly Mr. LaTourette's suggestion, putting it out there that, look, if you want to play that kind of game, well, then, this is what you may face. And I would think that others out on our waterways would want the same kinds of things. Mr. Taylor. Mr. Taylor. Thank you, Mr. Chairman. Captain Stroh, I have some small idea of your huge responsibilities, and I do appreciate those huge responsibilities. All of us very much appreciate the phenomenal job the Coast Guard after Katrina, just remarkable. But I want to get to a conversation I had, interestingly, over a weekend. A guy who sells electronically controlled valves to the oil patch was ribbing me that he has to have a TWIC card. So here is a guy who probably will never go out on the water, but does go to waterfront facilities, has to get a TWIC card, and it didn't bother him much because his employer paid for it. But, on the flip side, we have got people who are pushing barges full of fuel through a body of water that regularly has tankers with benzene, styrene, some of the most dangerous chemicals around that, if they were to rupture these tanks, would kill hundreds, if not thousands, of people that live near the water or might be on a cruise ship that is tied up at the river. So this accident really did have the potential to have killed hundreds, if not thousands, of people under a slightly different scenario. And I am not trying to be alarmist about this, I am just visualizing what could have happened. The Coast Guard is, again, enforcing TWIC laws. The Coast Guard is out there enforcing fisheries. The Coast Guard is enforcing a lot of things. When you tell me, though, that you are only conducting one patrol of Port New Orleans once a week, I have got to tell you that someone out there says I have a very small chance of getting caught with an unlicensed operator. My constituents instinctively know where the speed traps are and instinctively start slowing down when they get close to them. It is just human nature. But if someone is only going to see a boat out there once a week, they know that I can get by with paying less money to an unlicensed operator, and I have got a very small chance of getting caught. In fact, if this accident hadn't have happened, this guy wouldn't have been caught. So the question is does that come down to a question of resources? Has Congress or the Administration--it could be either or both of us--given you too many responsibilities and have you tried to do too many things with your limited funds? I do know that that is a degradation. There used to be a daytime patrol and there used to be a nighttime patrol, and they would intentionally move the hours around so that those high visibility patrols, people didn't know when they were coming. So how does this happen, Captain, and, above all, how do we correct this? Captain Stroh. Sir, I probably wasn't as clear as I should have been. My answer was in response to your question about downtown New Orleans, the central business district. In my AOR, we probably have patrols done daily in the lower part of the river, in the upper part of the river. So resources is not the issue; we have plenty of money for gas. At minimum, we are downtown in the central business district weekly, but we have vessels out everyday in a different part of my AOR doing the good work. So I am sorry if I misled you on that. To reiterate, we have plenty of boats, plenty of resources. Mr. Taylor. Captain, if I may. You didn't get to be a captain--you got there because you are a smart man. Obviously, we have a problem. How would you address this problem? Because the things that jump out at me would be, number one, increase the fine, just like we did on the Oil Pollution Act of 1990, to make the offense so expensive that people will take the steps so that the offense doesn't happen. That is the way I looked at OPA 90 and I think it has worked. So do we increase the fines for people who knowingly have an unlicensed mariner out there? Do we change the requirements on the Certificate of Financial Responsibility and lower the tonnage of the vessel that has to have one and include the fact that they have to have a licensed operator on board? I am asking for your recommendations. We obviously have a problem. So what would your recommendation be to solve this problem, or would it just be more enforcement of existing laws? Captain Stroh. I think through the Marine Safety Plan that Admiral Watson is working on, it is going to bring more capacity to my unit, and that will be a very good increase and help to the situation at hand. Also, with the inspection towing vessels here in the near future, that will create a greater presence on that type of vessel. Those two are two big steps in the right direction Mr. Taylor. Should we increase the fines for violators? Captain Stroh. I do know---- Mr. Taylor. Just roughly. I would hope that the gentleman from AMO will address this, American Waterways Operators. There has got to be a pretty good difference in the cost of paying a deck hand and a licensed operator. And if you can get by for a week or two with that savings, you have already covered the cost of that $2,000 fine, I have got to believe. So, is one way of addressing this--I am asking would there be any value to increasing the fine for someone who knowingly does this, or in something other than an emergency scenario? Captain Stroh. I see that as something we definitely need to look at. I know a lot of companies out there fear the lawsuits that come from an investigation more so than the civil penalties that come from our investigations. Mr. Taylor. Thank you, Mr. Chairman. Mr. Cummings. All right, I want to thank all of you for your testimony. We have a vote. We are going to recess for a short period to do a vote, and I expect we will be back here somewhere between quarter after and 12:30. Thank you. [Recess.] Mr. Cummings. We will now hear from Mr. Mario Munoz, who is the Vice President of Vessel Operations, with American Commercial Lines; Mr. Eric Dawicki, President of the Northeast Maritime Institute; Mr. Richard A. Block, Secretary of the National Mariner's Association; Mr. Augustin Tellez, Executive Vice President of the Seafarer's International Union; and Mr. Thomas A. Allegretti, President and CEO of the American Waterways Operators. They tell me we are going to have another vote soon. So that you all aren't here until tonight, you might, if you feel like there are some things that you don't need to say, don't say them. Use your own discretion. I am not trying to rush you, I am just trying to make sure. Because we keep having these breaks, and we will be here for a good while. I don't mind being here, but I am sure you have things to do. Mr. Munoz. TESTIMONY OF MARIO A. MUNOZ, VICE PRESIDENT OF VESSEL OPERATIONS, AMERICAN COMMERCIAL LINES; ERIC DAWICKI, PRESIDENT, NORTHEAST MARITIME INSTITUTE; RICHARD A. BLOCK, SECRETARY, NATIONAL MARINER'S ASSOCIATION; AUGUSTINE TELLEZ, EXECUTIVE VICE PRESIDENT, SEAFARERS INTERNATIONAL UNION; THOMAS A. ALLEGRETTI, PRESIDENT AND CEO, AMERICAN WATERWAYS OPERATORS Mr. Munoz. Good morning, Mr. Chairman and Members of the Committee. My name is Mario Munoz, and I am Vice President of Vessel Operations for American Commercial Lines. I served as one of the incident commanders during the New Orleans oil spill response. I am here today to talk about the events that transpired following the sinking of ACL's double-hulled tank barge in the early morning hours of July 23rd. I will also be making recommendations to enhance safety. First, I want to express my deep disappointment that oil was spilled into the Mississippi River. As a native of New Orleans, I understand south Louisiana's exceptional culture, our important wetlands and the vital contribution that our region makes to the Nation's economy. American Commercial Lines is one of the Nation's leading inland barge companies. One of ACL's core values is safety: never compromising the safety of our people, of the environment, of our property or equipment. In 2008, ACL was the first marine transportation company to be named as member of the EPA's National Environmental Performance Track Program. ACL also received the U.S. Coast Guard's William M. Benkert Marine Environmental Protection Award. Please let me describe the events of July 23rd. At 1:30 in the morning, an inland tow boat operated by DRD Towing was pushing an ACL tank barge when it collided with a tank ship in New Orleans. DRD is an independent contractor based in New Orleans that provided towing services for ACL and other competing barge lines. The tow boat that was involved in the New Orleans oil spill is named the Mel Oliver and is owned by ACL. On July 23rd, the Mel Oliver was operated and crewed by DRD Towing under a long-term bareboat and time charter contracts. DRD Towing was required to comply with all applicable Federal and State regulations. Consistent with the terms of the charter agreements, the Mel Oliver was under the custody and control of DRD Towing as the sole operator. Now let me turn to the first phase of our spill response. Within minutes of the event, ACL was notified that a collision had occurred involving one of our barges and that there was a potential spill. Rather than waiting for companies who were operating the vessels involved in the collision to step up, we put our oil spill response plan into action. Within minutes, ACL activated our local oil spill response organizations and directed them to engage a potentially major spill. Our approach to the response was to deploy all available resources as quickly and safely as possible. Although we initially did not know the extent to which our barge was damaged, we responded with a worst case scenario approach and planned for a total loss of the product, which was approximately 10,000 barrels of No. 6 fuel oil. Following the prioritized objectives laid out by our incident command staff, containment booms had been placed on the municipal water intakes and near the damaged barge. Human safety was our number one priority. From July 24th, ACL initiated continuous air monitoring that included over 2.5 million air samples. None of those samples ever showed any contamination at levels harmful to human health. Protecting wildlife was also a top priority for us. From the beginning, we worked with specialists from the Federal and State agencies who set out to observe oiled waterfowl and mammals. Thankfully, recorded wildlife deaths were kept low. Significant wildlife impacts were avoided by protective measures put in place early in the response. Within the first week, the unified command grew significantly. At its peak, we employed 2,300 personnel, 200 response boats and deployed over 100 miles of boom. We cleaned over 100 deep draft ships and over 1,100 barges and boats. Due to the collision, the damaged tank barge had settled in the base of the Crescent City Connection Bridge. I have included an illustration of the barge and the salvage operation for your review. While dangerous and complex, the barge was successfully salvaged without any other significant incidents. The barge design allowed us to reclaim one-third of the oil that was thought to have been lost. As Chairman of the Towing Safety Advisory Committee, I have been directly involved in the development of both the Inland Towing Vessel Licensing Standards and Towing Vessel Inspection Standards. I am encouraged that the Coast Guard is close to publishing the notice of proposed rulemaking for the towing vessel inspection process. TSAC has recommended the new regulations include a strong emphasis on the safety management system. When a vessel's certificate of inspection is coupled with a measured safety management system, the combination will provide the Coast Guard with a solid enforcement tool that ties a vessel's human factors directly to a company's ability to engage in commerce. ACL also supports a program of targeted enforcement from the Coast Guard. Current laws must be adhered to. ACL is also working with AWO to improve the Responsible Carrier Program. We need to make the results of RCP audits immediately available to trade association members and the Coast Guard alike. I would like to once again recognize the Coast Guard, NOAA and State officials, especially Captain Lincoln Stroh, for his leadership in the Unified Command. I also want to thank this Committee for the opportunity to testify, and I am available for any questions. Thank you. Mr. Cummings. Thank you very much. Mr. Dawicki. Mr. Dawicki. Thank you very much, Mr. Chairman and Members of the Subcommittee. Thank you for calling this hearing and thank you for the opportunity to testify this morning. I am Eric Dawicki, President of Northeast Maritime Institute, located in Fairhaven, Massachusetts. NMI is one of the largest privately-held maritime education and training institutions in the United States and has trained approximately 35,000 mariners over the Institute's 27 years of operation. I am a fourth generation mariner, having started my career aboard fishing vessels and inland passenger ferries and as part of the United States Coast Guard Reserve. I later served on board LNG and dangerous liquid tankers. I also served as part of the management team for LNG tankers. In addition to my present position as President of Northeast Maritime Institute, I am also the President and CEO for the Commonwealth of Dominica Maritime Registry, a company responsible for the management of the Commonwealth of Dominica Maritime Administration's 400 vessel fleet. First, let me state up front that I understand that my testimony this morning might be construed as controversial, however, it seems that the greater interest of serving my Country through testimony is an imperative. It is not only a duty, as directed, but it is sincerely an honor to appear before you today to impart my views on the case and effects of the recent economic, environmental and operational crisis caused by the oil spill on the Mississippi River. In light of my experience and exposure to the inland and western river trades, I am compelled to testify that this segment of the Nation's maritime industry is severely flawed. Everyone sitting here today has a significant stake in the oil spill that occurred on the Mississippi River last July 23rd. But let me be clear: we are all responsible for ensuring that we as a Nation have in place the sound foundational, operational and technological capability to prevent tragedies like this oil spill from ever happening again in the United States. The captain who left the vessel under the command of a non- licensed mariner, the non-licensed mariner who agreed to take the vessel across the river, the company that operated the tow boat, the charterer that hired the company, the United States Coast Guard, Congress, the President and I appearing before you this morning must enlist your support. We are all accountable for the safety and preservation of life, property and environment in this great Nation's waterways. The maritime safety program in the United States is in urgent need of restructuring and a more solid focus on its mission and its operations is essential. While the mariners, the shipping company, the charterers, the Coast Guard, can be picked apart at every level, I believe that it will take a courageous stand by this very body to initiate a solid set of standards that this industry and the rest of the Nation's maritime industry comply with. There is no scapegoat here. There is simply a systemic flaw in the governance of the maritime industry, from mariner licensing and work hour rules to appropriate watch standing principles, quality management systems, business management practices and enforcement of regulations all play a role in this failing system. Our maritime industry is fractured on almost every level. It will take strong leadership by this Subcommittee and this Congress to independently investigate the systemic pitfalls as well as the strengths of the current system, to put in place enhanced performance and to redevelop this industry to be revenue generating. This industry can once again become an industry of excellence. The economic impact of this very spill alone is predicted to be hundreds of millions of dollars per day. I state that as a property owner that has been affected by an oil spill on Buzzards Bay. The failure to prevent the spills continues to have negative impacts on my community many years later. I would suggest that a comprehensive economic impact statement might indicate that the negative impacts exceed three times the current estimates. I strongly believe that 80 percent of all maritime casualties can be avoided. I am convinced that there are absolutely no excuses for human error when managing the safe operation of a vessel. Unfortunately, our system, without stronger legislative and regulatory sanctions, enables excuses and exercises either special treatment or lackadaisical attitudes toward this very industry. More can and must be done. Thank you. I am pleased to answer any questions you might have. Mr. Cummings. Thank you very much. Mr. Block? Mr. Block. Mr. Chairman, Members of the House Coast Guard and Maritime Transportation Subcommittee, I appreciate the opportunity to speak here today. I am the Secretary of the National Mariners Association and speak on behalf of approximately 126,000 lower-level mariners who work on tugs, tow boats, offshore supply vessels and small passenger vessels of less than 1,600 gross tons. Lower-level mariners comprise a clear majority of all American merchant mariners. There are a number of problems that need to be resolved. We have new licensing regulations that went into effect in a very leisurely manner between May 21st of 2001 and May 21st of 2006. An entirely new apprentice mate/steersman position was added. I worked on the TSAC committee that prepared much of this material. We left it in the hands of the Coast Guard. Unfortunately, the word never really got out on what apprentice mate/steersman was all about and how to transition from one license to another. The Coast Guard continues to have difficulties in licensing and unfortunately, driving many people away from the industry. Unfortunately, it has taken a $275 million accident to raise public attention here. In the past dozen years, there have been a number of other accidents, Bayou Canot, the Queen Isabella Causeway accident, Webers Falls, the Rhode Island oil spill, San Juan oil spill, Buzzards Bay oil spill. I find myself in agreement with an article that appears in the Waterways Journal, that a new inspection regime might have prevented this spill, might have prevented it. Where are these new regulations? We have been sitting, waiting for these for four years. Why is a towing vessel so different from a small passenger vessel? There are many, many similarities. Why can't the regulations from one set of vessels apply to another? It seems to me that this entire rulemaking process is taking entirely too long. The licensing figures that Admiral Watson had mentioned this morning, they were all in the single digits. Unfortunately, I hear about people running vessels without the proper license every day. Where is the Coast Guard? Why can't they hear this? We have reported many such incidents to the Coast Guard. The problem appears to be Coast Guard investigations. But this matter has already been covered in another hearing. There was an excellent report done by the Department of Homeland Security. We contributed approximately 13 volumes of material to that report. The DHS paid very close attention to us. And I am very satisfied with their report. I think that Coast Guard investigations is a very serious problem in the marine safety system. It is not a new problem. It has been around since 1994. The Coast Guard themselves did a report on it in 1996. There are problems with Coast Guard inspections. There is a very serious problem with the entire marine safety system. We have written a number of reports on this, we have sent approximately 20 of them to Congress. A year ago, I presented a list of these reports. I believe in listening to the opening statements by Chairman Cummings that you have read these reports, that you understand what is going on here and that some action needs to be taken. I believe the action that you are planning in H.R. 2830 is exactly what is needed. I want to congratulate the Subcommittee and the entire Committee for putting this together. I think you have done the right thing. Thank you. Mr. Cummings. Thank you. What the Committee is going to do is hear from Mr. Tellez, then we will have approximately five minutes to get over to the vote. There is one vote--we are of the opinion there is one vote at this time. Then we will come right back. Mr. Tellez, then we will adjourn and come right back. Mr. Tellez. Thank you, Mr. Chairman. My name is Augie Tellez, Executive Vice President of the Seafarers International Union, which represents thousands of American merchant mariners employed in all the maritime sectors. Most of my statement has been eloquently stated by you and others on the Committee. Therefore I will just in the interest of time start skipping around. The one thing I will repeat is that the undeniable fact is that that vessel was operating without a qualified mariner in the wheelhouse and with no licensed master aboard. Unfortunately, it was also not the first time that this company performed this practice. As Ms. Richardson said, it was no secret that this company was a bad company, or better yet, an ``irresponsible carrier.'' So it begs the question how was this company allowed to operate, why did a company as big as ACL charter it, knowing full well that it was an irresponsible carrier. To understand that, you have to understand how this industry evolved. Basically, the industry, no matter what the trade, fell into two categories. One was the regulated industry, which included and has all the protections and enforcement inherent in that name, and the other was the non- regulated sector of the industry, which the tugboat in question, the Mel Oliver, fell under, at least until spring of 2009, anyway. To their credit, the industry itself, with the associations such as AWO, developed self-policing and third party ordered systems to fill that gap. Those policies may very well work in a perfect world. But in the imperfect and real world, there are companies who will choose the short-term commercial and financial advantage over and above safety of the environment and life. And I might add, to the detriment of responsible carriers who do invest in the effort to provide safe marine transportation on the rivers. What was the immediate result of the company not abiding by the rules? As stated earlier, their membership was revoked. In other words, Mr. Chairman, they were thrown out of the club but they were allowed to still operate in the neighborhood. The company still operated in the inland marine environment, along with hundreds of others who do not belong to the program. The SIU does believe that the program does have merit and that most members have a sincere interest in providing safe and efficient transportation. However, a deep regulatory void exists, as you say, a regulatory gap. The U.S. Coast Guard is the Government agency responsible for promoting marine safety and protecting the environment on the inland waterways. In fact, recently in an article, a representative of AWO recently noted that only the Coast Guard can truly regulate the industry. We agree. Unfortunately, they have been unable to properly do it, for a host of reasons, one of which may be the lack of sufficient resources and funding. Self-policing works only when everything is going well, especially when there is no shortage of manpower and the economic conditions are favorable. Today, that is not the case. And many companies seek short-term answers, as evidenced by the recent accident and the practices that led to it. Now, because of the shortage of manpower in the industry, inland companies are looking to Congress and the Coast Guard to decrease the requirements for the apprentice mate/steersman to progress to mate/pilot. At this time, I would be remiss in not mentioning the SIU's school in Piney Point, Maryland. We work with our companies through the school to help ensure the company's vessels are crewed with properly trained and qualified people. The school has developed a total program for professional advancement, resulting in a highly-trained, up to date, competitive work force for the maritime industry. The latest five year Coast Guard marine safety performance plan has placed the towing industry under the heading of ``significant residual risks.'' The report notes that the environment in which the towing vessels operate makes this industry especially high risk. The SIU advances that the significant residual risk designation makes it abundantly clear that the U.S. Coast Guard must regulate all aspects of the tug and barge industry. Their marine safety program for towing vessels must include onsite towing vessel inspections, setting of safe manning levels, establishing training requirements, standards, et cetera. In conclusion, the SIU and maritime labor has a history of appearing before Congress affirming their commitment to safety in the maritime environment. On multiple occasions we have testified for and supported the initiation of merchant mariner documents for mariners on the inland waterways, attempting to demonstrate that such documents and their inherent requirements and protections indeed would improve safety in that sector. Now is the time for the Subcommittee to revisit this important issue. The SIU stands ready to assist the Subcommittee and the Coast Guard in promoting safety and environmental protection in the brownwater sector. As always, in closing, I urge all of you to visit us at Piney Point. Mr. Cummings. Thank you, Mr. Tellez. We stand in recess for the next 20 minutes. Thank you. [Recess.] Mr. Cummings. The Subcommittee will come to order. Mr. Allegretti. Mr. Allegretti. Thank you, Mr. Chairman, Members of the Subcommittee, for this opportunity to testify here today. The members of AWO share your disappointment and your frustration at the oil spill that gave rise to this hearing. We know that Congress and the public have zero tolerance for spills and rightly so. For the hundreds of AWO members who try hard to do the right thing every day, this accident is a painful reminder that we must do better. Zero spills is our goal, as it is yours. The spill that brings us here today, as has been said, occurred when the towboat Mel Oliver was under the individual control of a steersman who lacked the legal authority to operate the vessel, except under the direct supervision of a licensed master or pilot. Let me be clear: this is a violation of current law, Coast Guard regulation and the AWO Responsible Carrier Program. AWO will neither defend nor seek to explain away such conduct. It is inexcusable and it is not representative of the way our industry operates and the care we take to uphold the public trust. For the record, DRD Towing, the operator of the Mel Oliver, is no longer a member of AWO. The company's membership was terminated last month for failure to meet its obligations under the Responsible Carrier program. Mr. Chairman, accidents like the Mel Oliver spill are not the norm in our industry. The culture of mediocrity that you referenced that results in such incidents stands in stark contrast to the culture of safety and stewardship that AWO members have widely embraced. The members of AWO share your determination that accidents like this never happen again. I would like to highlight three recommendations for actions that Congress, the Coast Guard and the industry can take in support of this essential goal. First, AWO should and will develop a procedure to provide its member companies with immediate, real-time information when a company fails a Responsible Carrier Program audit. The RCP already requires AWO members to abide by vendor safety procedures for ensuring that vendors who provide towing and fleeting services to their vessels comply with high standards of safety. AWO will develop a means to provide immediate notification to all of our members when a company has failed an RCP audit. This will help our members exercise due diligence with respect to the safety of their vendors. Second, the Coast Guard should institute a targeted enforcement program that focuses on towing companies with marginal operating practices and poor safety records. As Chairman Oberstar has said many times, safety begins in the corporate board room. But when companies are unwilling to embrace their responsibility, Government must step in. This kind of risk-based enforcement scheme will make smart use of scarce Coast Guard resources to assure that current laws are enforced. Both the industry and the Coast Guard know that pockets of substandard operations still persist. These bad actors can be targeted without disrupting the operations of the vast majority of towing companies that operate safely and with respect for the law. Third, the Coast Guard should publish a notice of proposed rulemaking by the end of this year to implement Congress' 2004 Towing Vessel Inspection Mandate. The Towing Safety Advisory Committee recommendation that the Coast Guard rule should include a safety management system as a core component would provide an additional and important safeguard for preventing incidents like the Mel Oliver in the future. Non-compliance with the safety management system is a leading indicator of casualties, and had the TSAC-recommended regulations been in place this year, the Coast Guard would have been notified when DRD Towing failed its third-party audit in May. That would have forced the company to either tighten up its procedures or risk losing its license to operate and its Coast Guard certification of inspection. So Mr. Chairman, our industry has been uncommonly progressive in partnering with Government to make our waterways safe and clean. Both this Subcommittee and the Coast Guard can count on AWO to be a willing partner in implementing these recommendations and learning whatever other lessons emerge from the hearing record or from the Coast Guard's accident investigation. We share your commitment to fulfilling the public trust and to operating on our Nation's waterways with constant attention to safety, stewardship and full compliance with the law. Thank you. Mr. Cummings. Thank you very much. Mr. Allegretti, you heard the testimony, and your second recommendation went to this targeted enforcement, I guess you might call it. When you heard the testimony of the Rear Admiral, does that fit with your recommendation? Mr. Allegretti. It absolutely does. It is long overdue and we should get on with it immediately. Our industry does not like sharing the river with bad actors. And as I said, we know that there are still pockets of substandard operation that exist on the river system, on our coasts and in our harbors. The Responsible Carrier Program has moved our industry forward immensely in the last 15 years. But as you said, sir, AWO is not a regulatory body. So we lack the regulatory authority to force people to do the right thing. A targeted enforcement program is, in our view, the most important and immediate action that we can take to ratchet up attention on those who deserve additional scrutiny from the Coast Guard. Mr. Cummings. You know, it is interesting, Mr. Dawicki and others, that the Coast Guard, in their testimony, particularly the Rear Admiral, constantly said these are professionals. And I respect that. But you all heard the Ranking Member, Mr. LaTourette, talk about how we need to maybe have some amendments to the law which create a heavier hammer over some folks to say, look, if you are going to do these things, you are going to be subject to some jail time. I just want to get your opinion on that, and then I am going to come back to you, Mr. Munoz, for your opinion. Mr. Dawicki, did you have an opinion on that? Mr. Dawicki. Yes, thank you, Mr. Chairman. I think the reality is you are scratching the surface. You think about these mariners today, they are poorly-paid. I think if you scratch the surface and you scratch a little bit deeper, you may or may not find out there was actually a captain assigned to that vessel or maybe not. Maybe they were sailing short- handed. I don't know, I don't want to suggest I know. Mr. Cummings. I understand. But would you agree that we have to start somewhere? Mr. Dawicki. You have to start somewhere. But it really requires a comprehensive review. This industry should be no lesser regulated than the deep draft industry. The fact, in my short experience with this industry, I scratch my head and think about the liabilities that these companies put themselves under in the way they operate their vessels. I just can't believe it. Again, I came from the LNG industry, where the best of the best operated and we put money into the company, the ships and personnel. I can honestly say I have not seen that in this segment of the industry. So I think a comprehensive review of all of the laws must be undertaken in order to ensure that if you are regulating a deep draft vessel which travels from A to B, with very limited activity, and you are regulating the hell out of it, excuse my terms, and then you take a vessel that is operating in a coastal piloting arena or a river boat arena, where you have all kinds of activity going on, you are going to find that the standards are heavily outweighed. It is surreal to me. I think if you really look at it deeply, you will find that the international standards, as minimum standards, are a good place to start. Mr. Cummings. Mr. Tellez, do you have an opinion on that? Mr. Tellez. Yes, sir, Mr. Chairman. The only thing I would add is, when Mr. LaTourette's hammer comes down, let's make sure it comes down on the right head. In the real world, we don't fully expect an apprentice mate to buck the orders from high above unless he wants to terminate his career at that moment. Are we going to penalize someone for not making the left turn when in fact he was never trained or taught to make that left turn? We have to go beyond that person on the boat to the root cause of who allowed that person up there on their own and why they were allowed up there. So once again, when that hammer comes down, let's make sure it comes down on the right head. Mr. Cummings. Mr. Block, do you have an opinion? Mr. Block. I am going to agree with Mr. Tellez. Mr. Cummings. Let me ask you, Mr. Munoz, and then I want to get to my colleagues, since we have to be out of here, as a matter of fact, I am going to go to Mr. LaTourette right now. Because we have to be out of here by a quarter of. Mr. LaTourette. Thank you, Mr. Chairman. I will be quick, I hope. Mr. Tellez, I agree with you and I think I said that, that I would propose to change title 46 to hold responsible the person that knowingly operates a vessel that he is not qualified to operate, or the person that commanded him to do it or the person that is responsible for him being in that position. I do not think it is unreasonable, when you are driving a boat, to have a lower standard than we would punish you for for driving a car, particularly when you are driving around with a bunch of oil. Mr. Dawicki, if I could just ask you a couple of questions. There was an article last year in 2007 about some resistance that you were having by some folks, discouraging fishermen and others from attending your safety workshops. Are you familiar with that discussion last year? Has that situation resolved itself? Mr. Dawicki. Actually, I believe fishing vessel safety, like this industry, run a parallel line. It is two unregulated industries that really need enhancing. Again, we are looking at saving the lives of mariners and ensuring that they can do the same things that you and I can do, Mr. LaTourette, put food on the table and educate our children and make sure that they have the same opportunities that you and I have. Mr. LaTourette. Can you briefly tell the Committee how many companies from the inland industry you have worked for, the number of employees that you have trained for those companies? Mr. Dawicki. We have been exposed to three or four companies since 1995, when I started at NMI. I don't know what the statistics are prior to that. I would have to ask my staff. In terms of training inland mariners, I would say maybe anywhere to 1,500 to 2,000 since 1995. Mr. LaTourette. Thank you. Mr. Munoz, your company continues to move petroleum products in the inland waterways. Could you briefly tell the Subcommittee just a couple of lessons learned from what happened in July, if there are any? Mr. Munoz. Yes, Congressman, we do continue to move liquid products on the inland waterways. Certainly some of the lessons learned in this exact incident are really hard-pressed for us to be able to really dig deep down right now to figure those out. Obviously we still have an ongoing Coast Guard investigation as well as an ongoing NTSB investigation. We do know some preliminary facts, and the preliminary facts that the Coast Guard has released is that the towing vessel that was operated by DRD Towing was being operated by a master that was not properly licensed. Also, that we had a situation where the captain of that vessel had abandoned the command of that vessel. So we have existing laws in place for those requirements today. And in getting to your question on increased enforcement, as I stated in my testimony, we certainly recommend that Coast Guard have targeted enforcement, based upon risk scenarios of companies. But yes, we do continue to operate today. And we are certainly prepared to take a good look at this investigation and make sure that we are able to spread some lessons learned from this incident. Mr. LaTourette. Thank you. Thank you, Mr. Chairman. Mr. Cummings. Mr. Baird. Mr. Baird. I thank the Chairman, and I thank our witnesses. I have the privilege of representing the Columbia River on the Washington State side, plus the Pacific Coast and the Puget Sound area. So we have a lot of experience with tug companies. I have been impressed since I came to Congress nine years ago that this is an industry that actually asks to be regulated. I think many of us in Congress are pretty familiar with sitting up here while people say, don't regulate us, don't do anything, we will take care of it. Here is an industry that for years now has been saying, we need tighter oversight, we need best practices, basically, with a goal of zero accidents. That is really what it ought to be. It is frankly refreshing. What puzzles me is, if we got word that al Qaeda was going to hatch a plot to drag a barge in front of a boat, we would move heaven and earth to stop it. Here we have proposals for best practices that would, I think, and my question is going to be, if the proposals you have put forward had been implemented and enforced and things monitored the way you are recommending, would we have avoided this accident and what would we avoid in the future? Mr. Allegretti? Mr. Allegretti. At the risk of suggesting that I have 20-20 hindsight, which I don't, I think it is reasonable to say that if the Coast Guard regulations had been in place, there would have been a process whereby, when that auditor went to DRD Towing and then concluded the audit, and said, I am not able to certify you as being in compliance, in this case it was with our Responsible Carrier Program, in the future, it would be in compliance with the Coast Guard regulatory standards, he would have been obligated to immediately call the Coast Guard and inform them of that. I assume, again without being able to know exactly how the future system would work, that the Coast Guard would then immediately speak to the company to determine what the deficiency was and whether that deficiency was easily corrected, or whether it presented a risk in terms of a serious accident or injury or fatality and would take the appropriate action. That is what is missing now, Mr. Baird. The weight and effect of the Coast Guard's regulatory standard and enforcement is missing. Until we have that, it is going to be too easy for some people to look the other way in terms of the industry's best practices, because there is no consequence to ignoring them. Mr. Baird. And there is a need, I understand also, for promptness. In other words, an audit that says, this company is deficient, they have practices that are questionable, if there is no prompt action on that, there may be every incentive for a company that is already skirting things to say, well, let's just wait until they catch us. And right now if they catch us, A, they are probably not going to and B, if they do, that is not a big deal if that do. If we told everybody the speed limit is 95 miles an hour and by the way, there are no cops on the road, and if they catch you they won't give you a ticket, it would be a spooky place to drive. And that is to some extent, and my colleague Mr. LaTourette and the Chairman pointed that out, to some extent we have a very dangerous situation not being regulated the way it should be. I want to commend those of you who have been advocating for this, and Mr. Chairman, I think it is incumbent upon us and upon the Coast Guard to move this forward. We would move quickly if there were intentional threats to maritime safety from outside entities. Now we have internal threats and we are not moving as swiftly as we should. So I want to thank all of you for you initiative to try to move this forward. If there are any other comments you would like to make, I would welcome those. Mr. Tellez? Mr. Tellez. Yes, sir. The other danger here is, on any given day, the Coast Guard could tell you who is on any vessel that is in our waters, the regulated vessels. They can attest and confirm their skill sets because of documentation and certification. They would be hard pressed to do that for the rivers. I don't imagine there is anybody out there who can tell us who is on every vessel, what their skills sets are, what their qualifications are, on any given day. Mr. Baird. Even minimum? Mr. Tellez. Even minimum, sir. Mr. Baird. If I am driving down the road, I know there will be some illegal people who didn't get their driver's license. But I am assuming most drivers have met certain verbal and practical tests through the driver's license bureau. Mr. Tellez. For the most part, in your world, Puget Sound and the Columbia River, those are regulated vessels up there. So there is some oversight and there is a whole host of information readily available at a touch of a button. That is not the case on the rivers. Again, I tell you, there is no one who can tell you who is on every vessel that is plying the rivers right now, today. Mr. Baird. I thank you for that insight. Any others? Mr. Block? Mr. Block. I think one of the problems is that we don't know who any of the deck hands are, we don't know any of the background. They don't have any Z cards. Not only deck hands, we are talking about the people who take the place of engineers, deckineers or others that may be untrained. What about cooks? These people are completely under the Coast Guard radar. I don't know how many there are, or who they are, or where they came from. I know that many companies draw very heavily upon prison systems. I don't want to take it out on people who are being rehabilitated. But at the same time, what about the TWIC card? Is that going to apply to deck hands on inland vessels? How about vessels under 100 gross tons as well? And people are sneaking huge vessels under the tonnage requirements. Mr. Baird. We may think deck hand, it may sound like not necessarily skilled, but if you hook up a tow in the wrong way, which is I assume what deck hands do, you now have a tow floating loose down the river. Mr. Block. And who has trained them? That is another problem. And is there any training that some of these companies require? Some do not require any training. There are NAVICs that the Coast Guard has put out. But our association is very critical of two of these NAVICs. One of them, I can't think of the numbers right now, but it has to do with training deck hands. Another one has to do with engineering personnel. The engine rooms are becoming much more complicated nowadays. And the Coast Guard requires nothing in the way of training. Thank you. Mr. Baird. Thank you. Thank you, Mr. Chairman. Mr. Cummings. Just one question, Mr. Munoz. Why do you all have this complicated arrangement where you lease out the barge for a dollar and then you pay them to do the work? Why is that? Why do you do that? Is that an unusual arrangement? Mr. Munoz. Chairman Cummings, it is not an unusual arrangement in the industry. If I may, before I answer your question, if I could just correct the record. I heard several times from the panel today that we are an unregulated industry. We in fact are not an unregulated industry. We are bound by the rules and regulations in 33 and 46 C.F.R. I just wanted to correct the record for that. As far as your question, Mr. Chairman, the situation where a vessel that may be owned by an operator and is bareboat chartered out to a third-party operator for a dollar a day, whether that vessel is chartered out for a dollar a day or $100,000 a day, that cost would just come back to us when we recharter the vessel on a term charter contract. So it is an accounting measure. The reason that is done primarily is because companies such as our company, we are based in Jeffersonville, Indiana, our main business focus is line haul towing, meaning we move commodities long distances throughout the river systems in the United States. When our barges and those products get to the origins or destination points where they either load or unload, there is a whole host of local companies whose business it is to shift those barges to or from terminals or do shorter shifting. Those local companies have the local knowledge of the river system. They can tap into the local markets from a labor perspective. So in a lot of ways, they are better suited to be able to staff those vessels and tap into that market, and with the knowledge of the local rivers. Mr. Cummings. Did you know of the history of DRD, its history in violating the law? Did you have knowledge of that? And would that have had a bearing on your decision to enter into the kind of arrangements that you just talked about? Mr. Munoz. Chairman Cummings, as far as the history that has been detailed today and the incidents that have come out as part of this investigation and in subsequent articles, we did not know of a history of DRD manning vessels without approved mariners or illegally licensed mariners, I should say. Mr. Cummings. So do you go about a vetting process? It seems like the equipment that you are leasing is very valuable and the liability seems to be quite, the potential is great. Do you do a vetting process at all? Mr. Munoz. Yes, sir, Mr. Chairman, we do. Let me just say that there is absolutely no incentive for a company like ours to charter or do business with a third-party operator if they are not a prudent operator. That does not make any economic sense whatsoever for us. We have to make sure that we entrust our equipment and our customers' cargo to prudent operators. Yes, we do have a vetting program for all of our third-party vendors. In fact, DRD was part of that vetting process and we had in fact vetted DRD. Mr. Cummings. We have to be out of this room, but Mr. Taylor just came in and I can tell you have a question or two. We have to be out of here, unfortunately. Mr. Taylor. I would just like to open this up to the panel. My gut tells me that we have an enforcement problem that had there been a high presence, had there been the certainty of the offending party that they were going to get stopped, I don't think they would have sent an unlicensed operator out there. I have been here for 19 years now, and what I have often seen is Congress overreact to a situation. So I want to open it up very quickly to the panel, if you could in one minute or less tell me what you think Congress ought to do to try and prevent this from happening, I would appreciate your thoughts. I will start with Mr. Allegretti. Mr. Allegretti. I can be brief, Mr. Taylor. I thought Mr. Cummings captured it very well. We need two things. We need stricter rules, and once the Coast Guard publishes the notice of proposed rulemaking, we will be on our way to stricter rules. And we need stricter enforcement. Admiral Watson committed this morning to a targeted enforcement program, which we think is exactly the way to go. Mr. Taylor. Mr. Tellez? Mr. Tellez. Along with strict enforcement, I don't know if that does it all. Because strict enforcement of a broken system, the system is still broken. I think what needs to happen out there is again, I go back to confirmation of skill sets, identification of the people who are actually out there doing the work. As Mr. Baird said, it is a little crazy to hear us ask for more regulation or more oversight. But I think that is what is needed. More documentation, more accountability. And the programs that Mr. Allegretti is involved in will work. Mr. Block. I believe that the Subcommittee has looked at the problems very diligently. In listening to Chairman Cummings' introductory remarks, you know a great deal about what is going on. We have been happy to furnish information to you. We believe the information has been used well. Keep up the good work. The more you know about us, the better you will be able to regulate the industry. And thank you for all of your efforts. Mr. Dawicki. Thank you, Mr. Taylor. I think, again, enforcement is, that is the easy part. It is having the right regulatory infrastructure in place, having the right system in place, and actually looking at the industry as a vital industry to the sound economic principles of how we need to operate the United States. I think this is an industry that does require regulation and enhancement of regulation. Thanks. Mr. Munoz. Congressman Taylor, let me first say that we support a program of targeted enforcement by the Coast Guard. We also, and that targeted enforcement should be based on casualty review. We also look forward to the conclusion of the findings as part of this investigation of this incident and look forward to working with this Committee and the Coast Guard for lessons learned. Mr. Taylor. Mr. Munoz, in the minute and a half I have left, I take it you represent American Commercial Barge Line? Mr. Munoz. Yes. Mr. Taylor. I appreciate the importance of local knowledge when you are dropping off your barges. I caught that point. But it does seem like a fairly convoluted process, when you take a multimillion dollar towboat, renting it to someone for a buck and then hiring your own boat back. So in the 20 minutes we have left, would you explain for my benefit why you do this? Again, I caught the local knowledge part. Mr. Munoz. Yes, Congressman Taylor. It is not a decision that is made based solely on economics. It is a decision that is made based on the fact that we have that asset, we have invested the capital in that asset. Quite frankly, it may not be our core business in some areas to shift barges in origins or destination points that our vessels may not go to. I understand you caught the fact about the local knowledge. That is an important piece of the bareboat charter arrangement. Being able to contract with companies that operate in those areas, do this for a living and give us that wider knowledge of that local area, absolutely. Mr. Taylor. Why would you use your boats to do that? Why couldn't you just contract with a true third party to do that? Mr. Munoz. Because in a lot of situations, we have the boats necessary. There is not an abundant supply of motor vessels out on the river system right now that are not being used. We have those assets. We may have assets that we have either in a laid-up fashion that we can have quick access to, that are at the fit and ready for staffing of crews. Mr. Taylor. Just for clarification, the insurer of that bareboat, that is the responsibility of the person that you lease it to as far as the insurance, as far as the Oil Pollution Act of 1990 and the Harbor Workers Insurance, maritime insurance necessary for the crew? Mr. Munoz. Mr. Congressman, let me try to clear things up a little bit. Mr. Cummings. You are going to have to clear it up very quickly. Mr. Munoz. Under the terms of the bareboat charter, that operator steps in the shoes of the owner of the vessel, crews the vessel and insures the vessel. However, for the certificate of financial responsibility in this incident on the barge, absolutely no liability was shifted for the oil spill response certificate of financial responsibility. We stepped up, we are continuing to clean the process. Mr. Taylor. How about for the tug? Because I am told it was carrying 23,000 gallons of fuel, which in itself could be a pretty good spill. Mr. Munoz. Maximum capacity fuel in that vessel was 23,600 gallons. It is the responsibility of the operator, unless negotiated differently, to insure that vessel for pollution. Mr. Taylor. Thank you, Mr. Chairman. Mr. Cummings. Thank you all very much. We really appreciate everything that you all have had to say. There will be some follow-up questions, particularly to you, Mr. Munoz. I did not get a chance to ask one tenth of the questions that I wanted to ask, but I will get them to you. Thank you very much. This meeting is adjourned. 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