Section 1: Introduction, Show Overview, and Guest Background
Captain Aaron Williams: (0:00–3:26) Hello, I'm Captain Aaron Williams. Welcome to Regulatory Excursions, the blog that delves into the lesser-discussed corners of Subchapter M regulations. In each article, I sit down with subject matter experts and industry thought leaders to explore Sub-M topics incorporated by reference that aren't discussed by the Coast Guard, TPOs, or industry groups as often. Think of this blog as your sub-niche insider's guide to Sub-M maritime compliance. If there is a specific topic you'd like us to tackle in a future article, or if you have thoughts to share, head over to www.bollardmarineconsulting.com/contact. We'd love to hear from you.
In the first installment of Regulatory Excursions, we're welcomed by Mr. Marc Hebert. He's a maritime attorney who's also involved in policymaking. He represents businesses and trade groups in matters ranging from maritime transportation to port security.
This guy's expertise spans maritime litigation and arbitration to the policy arena, where he works to help shape regulations that impact our waterways. Marc has advised the Greater New Orleans Port Safety Council, where he previously served as chairman. Currently, he's the ex-officio chairman and a board member.
For the past 12 years, Marc has moderated the Greater New Orleans Barge and Fleeting Association's River and Marine Industries Seminar. This guy is a prolific writer and speaker with a plethora of publications, citations, and speaking engagements under his belt. Mark is a partner in Jones Walker's Corporate Practice Group.
With more than 350 attorneys, Jones Walker is among the largest 140 law firms in the United States and is committed to helping clients address today's challenges, maximize opportunities, and set the stage for future success. Jones Walker's Maritime Practice Group provides cross-spectrum, transactional, regulatory, and dispute resolution counsel to domestic and international clients in foreign jurisdictions and across the United States, in state and federal courts, and before U.S. and international arbitral bodies. Jones Walker represents clients across the maritime industry, including inland barge lines, towboat companies, ocean-going shipping lines, cruise lines, terminal operators, stevedores, major oil and gas exploration, production, transmission, and service companies, offshore construction companies, builders of inland and ocean vessels, offshore platforms, barges, rigs and pipelines, and hull, cargo, P&I, and general liability insurers. With one of the largest groups of maritime-focused attorneys in the United States, Jones Walker is nationally ranked and recognized as a leading law firm in the maritime finance, litigation, and regulatory categories.
Marc Hebert, thanks for joining the show today. We appreciate you joining us.
Section 2: Guest Introduction: Marc Hebert and Jones Walker Overview
Marc Hebert: (3:26–3:36) My pleasure, Aaron. Happy to be here on behalf of me and my firm, Jones Walker. Thank you very much for having us and giving us the opportunity to participate in your blog series.
Captain Aaron Williams: (3:37–4:18) Marc, I reached out to a few folks in the industry. I wanted to find somebody willing to comment to your impact on the maritime community and your character. I reached Karl Gonzalez, the current president of Greater New Orleans Barge Fleeting Association. Karl was eager to speak on your behalf, and he had to say, "Marc is a great guy and a terrific lawyer. He's been involved in GNOBFA for many years. I know him both personally and professionally. He is truly an outstanding credit to the legal profession and the maritime community."
Marc Hebert: (4:19–4:44) Well, coming from Karl Gonzalez, that means a great deal. And the same goes for him in his role and capacity with what he does not only for GNOBFA, but also for the marine industry as a whole and his constant communication and interfacing with the Coast Guard and industry stakeholders. We really value Karl and appreciate the work that he does.
Section 3: Statutory Authority and Regulations in Subchapter M
Captain Aaron Williams: (4:45–5:11) Marc, at the beginning of each part of Subchapter M, a clause establishes a statutory authority. Is it safe to say that maritime safety regulations rest on the statutory authority or more on the regulations themselves? Can you clue us in and give us your perspective on the interplay between statutes and regulations concerning Subchapter M?
Marc Hebert: (5:12–7:10) It's interesting that you ask about Subchapter M establishing statutory authority at the beginning of each part of that subchapter. The question often arises, and sometimes people get confused when you have regulations and statutes. Let's face it, for those of us who've aged a little bit and have seen the "I'm Just a Bill up on Capitol Hill video," we know laws are developed and enacted by Congress and then they're signed into law by the executive branch.
And that is your statutory authority that lends to the creation of regulations. And, of course, regulations are wholly based on statutory authority. Without a statute allowing an agency to develop, create, implement, or, as we say, promulgate a regulation, you can't have a regulation. It would get shot down. And so, the interplay between the statutes and the regulations is critical. Concerning statutory authority—the more specific that statutory authority is—the greater the ability of the agency to create regulations upon that statutory authority. The end goal is to enact the will of Congress. At the end of the day, the agencies are the facilitating arm, the tool that works with Congress to implement laws created to run our country.
Subchapter M is no different. The laws and the statutory authority that created Subchapter M has allowed the U.S. Coast Guard to develop regulations, to promulgate those regulations, implementing Subchapter M, and making them effective upon the inland towing industry.
Captain Aaron Williams: (7:12–7:56) All right. Let us break this down a bit further. So, statutory authority is granted to the Coast Guard. This authority provides a framework for the Coast Guard to create regulations. With that being said, let us shift gears; for the benefit of the licensed mariners listening today or fresh faces in the industry getting started in operations or compliance, what are your thoughts on some of the practical implications that the Coast Guard's interpretation of statutes has on mariners, towing companies, etc.? It would be good for people just starting in this industry from the office side of things to hear this.
Marc Hebert: (7:56–10:27) The importance of the Coast Guard's interpretation is critical because you have regulations and policies that also implement those regulations. So, typically, the regulations are more specific than the statutory authority. There is some deference given to an agency in the creation of those regulations.
Now, the regulatory process and the framework for creating the regulatory process are broad, including all stakeholders. So, when the Coast Guard came out with its Notice of Proposed Rulemaking for Subchapter M, it allowed the industry stakeholders to come in no matter who those stakeholders were, and submit comments on those regulations to help the Coast Guard. It didn't matter if you were an insurance company, a marine surveyor, a vessel operator, a vessel charterer, or a compliance officer; you could submit comments. These stakeholders understand how the industry would operate under those regulations and what the pros and cons of implementing the regulations would be as outlined in the Notice of Proposed Rulemaking. So then, the Coast Guard can come back and define a final rule that will be implemented or promulgated and, for lack of a better word, enacted for the industry to follow. So, the interpretation application of the authority is essential, and what could help mariners and vessel operators, charters, towers, fleeters, etc., in interpreting Subchapter M is not only the policy documents that the Coast Guard creates, whether it's through bulletins or otherwise, MSIBs, as we call them, to mariners in the industry, but also the headings and the framework of the rulemaking itself.
So, if you go back, you can review in the preamble how the Coast Guard interpreted the comments of the stakeholders and what the Coast Guard believed was meant by those stakeholder comments. Also, you can see how the Coast Guard set up the rulemaking itself in the initial comments at the outset of the draft rule. So, these are the practical implications that the Coast Guard's interpretation has for mariners. Remember, looking at the policy behind the development and crafting of those regulations is essential.
Section 4: Liability, Privity, and Compliance
Captain Aaron Williams: (10:28–11:07) Can you enlighten us on the limitation of liability and privity or knowledge regarding modern towing operations? We know that many companies are using the Towing Safety Management System (TSMS) option, and I'm curious—is it difficult for companies to argue that they lacked privity or knowledge of conditions that led to casualties? This privity or knowledge was a big component in the limitation of liability cases in the past.
Marc Hebert: (11:08–14:13) This is an issue, frankly, that is near and dear to my heart. You mentioned Karl Gonzalez from GNOBFA earlier. We love that association, and every year, it facilitates the River and Marine Industry Seminar. Let me plug this event a little bit. It's held in New Orleans every year in April, in and around Jazz Fest; in case you would like to attend—you know—you can visit, be educated, and then also enjoy some of New Orleans' finest music and culture and food.
The issue of limitation of liability is a critical one for Subchapter M, and we have discussed this ad nauseum throughout the seminar and as part of our seminar program. Having looked at Subchapter M during the seminar as it was in its developmental stage and then after, the issue of privity and knowledge and also the limitation of liability could arise in a Subchapter M violation situation. But let's remember that for the violation of a regulation to impact privity and knowledge, as well as limitation of liability, there has to be that causal link. And suppose there is not a causal link. In that case, you may have a violation of the regulation. Still, absent of the causal link, there is no cause of the particular incident; whether it's a serious marine incident, grounding, or whatever it might be, you have a gap in negligence and liability.
So, the privity and knowledge issue does come into play significantly in Subchapter M because, as I've always said, at the end of the day, the TSMS and the Subchapter M regulations place the onus of compliance on the owner and operator of that vessel. So whoever's ashore pulling the strings, whoever's writing the check, whoever owns that boat, or whoever's chartering that vessel is ultimately liable for implementing the TSMS and the safety management system. And so the issue of privity and knowledge—not only what those individuals' management knew—but also what management should have known, does come into play concerning that privity and knowledge argument, and then that is married or matched to whether or not a violation of Subchapter M, a regulation, a federal regulation, and thus a federal statute, created the cause that resulted in the serious marine incident. There is that interplay that the mariners and management need to consider and follow, and that's why the implementation of Subchapter M is so critical in this industry because of that connection.
Section 5: DPA Role and Responsibilities
Captain Aaron Williams: (14:14–14:35) Where does the DPA or Designated Person Ashore fit into this scenario? They are in a pretty tight spot. I have even heard it said that whatever a DPA knows, that it's considered that the company has the same knowledge. Fill us in on that.
Marc Hebert: (14:35–17:53) That is a very interesting aspect of Subchapter M, because when you do look at Subchapter M, the Subchapter pulls in certain aspects of IMO. We know that IMO created the designated person ashore back in the day. We know that the U.S. industry follows IMO, and essentially what has happened with Subchapter M, in my opinion, is that the inland towing industry has now become like the rest of the world, right? They now have safety management systems. They now have thorough audits, more compliance, and it's a federal regulation. They are now required to follow certain regulations, not just guidance, but regulations that they did not have to follow previously.
There is a greater onus on the management, and then also on the designated person, to implement Subchapter M, to follow the TSMS, and to ensure that the company has not only the faculties, but also the necessary equipment, material, and training needed. The list is really exhaustive with respect to reporting, auditing, organization, and continued revisions to the TSMS because it is a living document. It is a living document, and it should be constantly changed and updated as the company, the DPA, the management, and the safety organization within the company learns from any mistakes, errors, and incidents. This allows continuous development of the TSMS to make it better, to ensure that risk is properly assessed, to ensure that policies are followed, and that compliance programs and training are in place so that incidents are as few as possible to non-existent. This allows organizations to mitigate risk and accelerates compliance.
So, is the DPA in a, let us say, "pretty tight spot?" Yes, because that designated person really does become the link between management ashore and the vessel crew and their operations to ensure that the company is compliant and the vessels compliant with Subchapter M. And thus, the continuous engagement and involvement of the DPA is critical to ensuring compliance with Subchapter M, and also to ensuring, as I mentioned before, that management has and knows that the proper tools are in place for the vessel operators, the crew, and the captain to do their job in following the safety management system and ensuring compliance.
Of course, if you choose the TSMS option, TPOs will audit everything. The TPO should be a good guide and helpful to you, the company, and the management in ascertaining any gaps in the system and helping to close those gaps. The TPO should also help you understand how the Coast Guard will view the closure of those gaps and whether or not they will be properly accepted in an updated TSMS.
Section 6: Chevron Doctrine & Industry Impact
Captain Aaron Williams: (17:54–18:09) Marc, what is your take on the toppling of the Chevron Doctrine? What kind of impacts could that ruling have on statutory authority as it applies to Subchapter M, the industry, Coast Guard, agencies, etc.?
Marc Hebert: (18:10–19:26) That is a change in the law that is being used to overturn specific agency regulations and policies and pull back agency "deference" that the courts have traditionally given in interpreting regulations. To take us back to your first question, concerning the interplay between statute and regulations, the question arises regarding removing the Chevron Doctrine and whether or not the statute is genuinely ambiguous.
Is it vague enough to allow or give an agency enough deference, or is it strict enough so that the agency knows and should know what that regulation will say? Of course, there has to be a challenge to the ruling, and until there is a challenge, we do not know whether the Chevron Doctrine, the toppling of it, if you will, the overturning of it, would have an impact on Subchapter M. I have not seen anything to date. I do not recall any court cases to date on Subchapter M and the Chevron Doctrine. But, you know, time will tell.
Section 7: Accountability in the Subchapter M System
Captain Aaron Williams: (19:27–19:44) If we look at the entire Subchapter M system holistically, from statutes to regulations, and then down to safety management systems, and then further down to individuals on vessels, isn't it fair to say that it just all boils down to accountability?
Marc Hebert: (19:45–21:53) Yes! It does boil down to accountability. And, of course, that was the purpose behind Subchapter M itself: to ensure that the inland towing industry is held to greater accountability in safety management and operations. But, again, that brings this industry in line with the rest of the world, where previously, these were uninspected vessels. While the towing industry had a great AWO program it was following, AWO had set up the program for them, and they worked with industry and with the Coast Guard, that was guidance. Now, companies have regulations; they have laws that they must follow. That is a significant change from what we have seen to date. It has been working. The industry has complied well. The Coast Guard has worked well with industry and vice versa.
There are always kinks to iron out, so to speak, and maybe that's where the toppling of the Chevron Doctrine comes in at some point. But it does lead to greater accountability through audits and inspections. And keep in mind, it is interesting because, in my opinion, a lot of the impact of Subchapter M has been more so on the non-red flag vessels than on the red-flag vessels.
Why do I say that? Because many of the red flag vessel carriers, and this is an interesting thing some people may not think about, were already working towards safety management systems under TMSA. I believe TMSA 4 is the current version. Having participated in TMSA 2 and 3, the oil and gas companies pushed down a lot of the regulatory structure they had to the operators through contracts and otherwise. Now, all the rest of the industry is caught up; everyone is operating from the same playbook. There is an equal and level playing field, and we see greater accountability and enforcement of that accountability.
Section 8: Agency and Lawmaker Communication
Captain Aaron Williams: (21:54–22:32) Marc, I want to ask you a question about how vague or how clear a statute is. We discussed earlier that the Coast Guard has a comment period on an NPRM, right? Is there communication happening between the agency and the lawmakers?
We know there's communication between the agency and the stakeholders down below, but does the agency communicate with the lawmakers up above that? Is it wholly on any agency or the Coast Guard to interpret Congress's intent in a statute?
Marc Hebert: (22:33–24:10) So let's talk about the intent of Congress first, because what we often see in the passage of laws by Congress and then subsequently their enactment is legislative history, and that would be found in conference reports or testimony, hearings on legislation, and thus laws once they're enacted, and that would give guidance to the agency. There could also be communications in the format of either informal discussions or letters from members of Congress or committees to the agency about the law and its implementation and its interpretation, what the intent is, and what the meaning is. Through the NPRM process, the rulemaking process itself, I typically have not seen direct communications or interaction between the agencies and the Hill, or Congress.
That is not to say that there have not been times when members of Congress have submitted comments to an NPRM. That certainly could happen. It is an open and public comment period, but it is a period for the agency itself to move through the rulemaking process pursuant to the Administrative Procedures Act and pull together any and all stakeholder comments and what they believe their interpretation of the law to be based on the statute as enacted and then the legislative history.
Section 9: Closing Remarks
Captain Aaron Williams: (24:11–24:31) Marc, thank you for allowing me to interview you today. This is our first article, and it was phenomenal to have somebody so well-versed and well-spoken about these topics as a guest. So, thank you again, and we hope to have you on again sometime in the future.
Marc Hebert: (24:32–24:42) It was my pleasure, Aaron. I enjoyed it, and the questions were great. Thank you again for the opportunity to join you.