7.1.1 The flag States are required to verify that
the organizations recognized to perform statutory certification and
services on their behalf fulfil the requirements of this Code. The
purpose of this verification is to ensure that the RO is performing
its statutory certification and service in compliance with this Code
and its agreement with the flag State.
7.1.2 The flag State should develop, implement,
and manage an effective oversight programme of the ROs that act on
its behalf.
7.1.3 An oversight programme should include various
monitoring activities, which may inter alia consist of audits, inspections
and audit observations (potential non-conformities). The flag States'
oversight programme of their ROs should be developed after carefully
assessing the factors associated with the RO as well as the extent
of access to the RO's records of statutory certification and services
that are made available to the flag State. The programme should also
consider the delivery of statutory certification and services with
respect to the provisions of the Conventions and with respect to the
national requirements and instructions published by the flag State.
Factors should include:
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.1 the scope and frequency of high level audits
of the RO carried out by flag States and independent accredited bodies,
and of internal audits carried out by the RO;
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.2 the extent to which audit findings, observations
(potential non-conformities) and corrective actions are made available
to the flag State;
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.3 the extent to which remote monitoring of the
RO can be undertaken by the flag State which can manifest itself in
several different ways depending on the scope of information that
is electronically available to the flag State. Remote monitoring can
include:
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.1 review of the contents of survey reports associated
with statutory certificates issued by the RO;
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.2 review of the effectiveness of the control
and rectification of deficiencies and outstanding requirements within
the deadlines established by the flag State through the RO; and
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.3 review of the RO's country-specific instructions
to determine that the flag State's national requirements are properly
and completely addressed by the RO;
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.4 flag State inspections carried out on board
ships to check the end-result of the certification process, with a
specific interest in their national requirements and/or implementation
of instructions issued to the RO; and
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.5 port State control detentions and deficiencies
allocated to the responsibility of the RO.
7.1.4 An oversight programme should also include
all activities necessary for planning and organizing the types and
number of monitoring activities, and for providing resources to conduct
them effectively and efficiently within the specified periods.
7.1.5 Those assigned the responsibility for managing
the oversight programme should:
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.1 establish, implement, monitor, review and improve
the oversight programme; and
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.2 identify the necessary resources and ensure
they are available and provided, as required.
7.1.6 An oversight programme should also include
planning, the provision of resources and the establishment of procedures
to conduct monitoring activities within the programme.
7.2
Oversight programme objectives and extent
7.2.1
Objectives of an oversight programme
7.2.1.1 The flag State should establish objectives
for an oversight programme, to direct the planning and conduct of
monitoring activities.
7.2.1.2 The following objectives should be considered:
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.1 management priorities;
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.2 flag State intentions;
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.3 flag State system requirements;
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.4 statutory, regulatory and contractual requirements;
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.5 need for ROs to be evaluated;
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.6 flag State, ROs, and other requirements;
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.7 needs of other interested parties; and
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.8 risks to the flag State.
7.2.2
Extent of an oversight programme
7.2.2.1 The flag State's oversight programme should
reflect the size, nature and complexity of the flag State's authorization
programme, as well as the following factors:
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.1 the scope, objective and duration of monitoring
activities to be conducted;
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.2 the frequency of monitoring activities to be
conducted;
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.3 the number, importance, complexity, similarity,
and locations of the ROs;
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.4 standards, statutory, regulatory, and contractual
requirements and other monitoring criteria;
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.5 the need for accreditation or registration/certification
of ROs;
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.6 conclusions of previous monitoring activities;
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.7 the concerns of interested parties; and
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.8 significant changes to an RO or its operations.
7.2.2.2 A flag State may enter into a written
agreement to participate in combined monitoring/oversight activities
with another flag State or States that have authorizations with the
same RO provided that the level of detail regarding individual flag
State requirements and individual flag State performance are addressed
at a level equivalent to an oversight programme conducted by each
of the individual flag State. Conversely no flag State may be compelled
by another flag State or organization to accept oversight of an RO
by others in lieu of conducting its own individual flag State oversight
unless it so elects by written agreement or is so provided in the
law of that State. A copy of all such agreements should be submitted
to IMO for the information of the Member States.
7.3
Oversight programme responsibilities,
resources and procedures
7.3.1
Oversight programme responsibilities
7.3.1.1 The flag State is responsible for managing
its oversight programme. The flag State should utilize competent individuals
that have an understanding of the oversight requirements, audit principles,
and the application of audit techniques. They should have management
skills as well as technical and business understanding relevant to
the activities to be monitored.
7.3.1.2 Those assigned the responsibility for
managing the oversight programme should:
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.1 establish the objectives and extent of the
oversight programme;
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.2 establish the responsibilities and procedures,
and ensure resources are provided;
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.3 ensure the implementation of the oversight
programme;
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.4 ensure that appropriate oversight programme
records are maintained; and
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.5 monitor, review and improve the oversight programme.
7.3.2
Oversight programme resources
When identifying resources for the oversight programme,
the flag State should consider the following:
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.1 financial resources necessary to develop, implement,
manage, and improve oversight activities;
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.2 auditing techniques;
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.3 processes to achieve and maintain the competence
of staff, and to improve oversight performance;
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.4 the availability of staff and technical experts
having competence appropriate to the particular oversight programme
objectives;
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.5 the extent of the oversight programme; and
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.6 travelling time, accommodation and other oversight
needs.
7.3.3
Oversight programme procedures
7.3.3.1 The flag State's oversight programme procedures
should address the following:
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.1 planning and scheduling of oversight activities;
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.2 assuring the competence of assigned personnel;
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.3 selecting appropriate personnel and assigning
their roles and responsibilities;
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.4 conducting monitoring activities;
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.5 conducting follow-up, if applicable;
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.6 maintaining oversight programme records;
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.7 monitoring the performance and effectiveness
of the oversight programme; and
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.8 reporting on the overall achievements of the
oversight programme.
7.3.3.2 For flag States with a limited authorization
programme, the activities above may be addressed in a single procedure.
7.3.4
Oversight programme implementation
The implementation of a flag State oversight programme should
include the following factors:
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.1 communicating the objectives of the oversight
programme to relevant parties;
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.2 coordinating and scheduling monitoring activities
relevant to the oversight programme;
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.3 establishing and maintaining a process for
the evaluation of assigned personnel and their continual professional
development;
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.4 selecting and appointing assigned personnel;
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.5 providing necessary resources to the oversight
programme, specifically the corresponding monitoring activities;
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.6 robust execution of monitoring activities according
to the oversight programme;
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.7 ensuring the control of records of the monitoring
activities;
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.8 ensuring review and approval of monitoring
activity reports, and ensuring their distribution to interested parties;
and
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.9 ensuring follow-up, if applicable.
7.3.5
Oversight programme records
7.3.5.1 The flag State's monitoring records should
be maintained to demonstrate the implementation of the oversight programme
and should include the following:
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.1 all records related to monitoring activities,
such as:
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.1 plans;
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.2 reports;
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.3 non-conformity reports;
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.4 corrective and preventive action reports, and
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.5 follow-up reports, if applicable;
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.2 results of oversight programme review; and
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.3 records related to personnel covering subjects,
such as:
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.1 assigned personnel competence and performance
evaluation;
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.2 monitoring and/or audit team selection; and
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.3 maintenance and improvement of competence.
7.3.5.2 Records should be retained and suitably
safeguarded.
7.4
Oversight programme monitoring and reviewing
7.4.1 The implementation of a flag State oversight
programme should be monitored and, at appropriate intervals, reviewed
to assess whether its objectives have been met and to identify opportunities
for improvement.
7.4.2 The flag State should develop and use performance
indicators to monitor the effectiveness of its oversight programme
for ROs. The following factors should be considered:
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.1 the ability of assigned personnel to implement
the oversight plan;
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.2 conformity with the requirements of the RO
Code, monitoring activities, and schedules; and
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.3 feedback from clients, ROs and assigned personnel.
7.4.3 The flag State should consider the following
performance indicators when evaluating the performance of the ROs:
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.1 port State performance of ROs;
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.2 results of RO's internal audits;
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.3 results of quality management system audits
performed by third-party organizations (ACBs);
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.4 the results of previous performance monitoring;
and
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.5 condition/compliance of ships that receive
survey and certification from the ROs.
7.4.4 The flag State should, on a periodic basis,
evaluate its overall performance with respect to the implementation
of administrative processes, procedures and resources necessary to
meet its obligations as required by the conventions to which it is
party.
7.4.5 Other measures to evaluate the performance
of the flag States may include, inter alia, the following:
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.1 port State control detention rates;
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.2 flag State inspection results;
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.3 casualty statistics;
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.4 communication and information processes;
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.5 annual loss statistics (excluding constructive
total losses (CTLs)); and
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.6 other performance indicators as may be appropriate,
to determine whether staffing, resources and administrative procedures
are adequate to meet their flag State obligations. Other performance
measurement indicators may consist of the following:
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.1 fleet loss and accident ratios to identify
trends over selected time periods;
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.2 the number of verified cases of detained ships
in relation to the size of the fleet;
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.3 the number of verified cases of incompetence
or wrongdoing by individuals holding certificates or endorsements
issued under its authority;
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.4 responses to port State deficiency reports
or interventions;
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.5 investigations into very serious and serious
casualties and lessons learned from them;
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.6 technical and other resources committed;
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.7 results of inspections, surveys and controls
of the ships in the fleet;
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.8 investigation of occupational accidents;
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.9 the number of incidents and violations under MARPOL, as amended; and
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.10 the number of suspensions or withdrawals of
certificates, endorsements and approvals.
7.4.6 The oversight programme review should also
consider:
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.1 results and trends from monitoring;
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.2 conformity with procedures;
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.3 evolving needs and expectations of interested
parties;
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.4 oversight programme records;
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.5 alternative or new auditing practices or monitoring
activities; and
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.6 consistency in performance between audit teams
in similar situations.
7.4.7 Results of oversight programme reviews can
lead to corrective and preventive actions and the improvement of the
oversight programme.