Page 23: of Maritime Reporter Magazine (November 2003)

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[email protected] too often the case. Congress has handed the Coast Guard a major new mission and then failed to provide funding for the per- sonnel and resources necessary to accom- plish the mission. Senator Hollings (D-

SC) has been particularly vocal about this shortfall, but the appropriations commit- tees have not been listening.

Congress, and in particular, the House

Subcommittee on Coast Guard and

Maritime Transportation, has challenged the Coast Guard repeatedly over the incon- sistency between the regulations and the

MTSA. On April 2, 2003. Representative

Oberstar (D-MN), one of the principal authors of the MTSA, stated on the House floor: "We [Congress] did not intend the security of the Nation to be placed in hands of the flag of convenience registers. We expect the Coast Guard to review the plans firsthand." Senators McCain (R-AZ) and

Hollings have requested the General

Accounting Office (GAO) to investigate whether all requirements of the MTSA are being executed effectively.

The Coast Guard Subcommittee con- ducted oversight hearings on June 3 and

July 22, 2003 into the Coast Guard's implementation of the MTSA. At both hearings, members criticized the approach taken by the agency in accepting flag administration approval of foreign vessel security plans. The Coast Guard, though, has not changed course.

The problem is not so much with the bureaucratic standoff between the

Congress and the Coast Guard. After all. most observers agree that the Coast Guard position is preferable and the Congress lacks its own enforcement capability. The difficulty lies with the foreign ship owner or operator who is stuck in the middle.

In the event that there is a transportation security incident (i.e.. a terrorist attack) in

U.S. waters involving a foreign ship sub- ject to SOLAS, things from a legal aspect will get very interesting. The owner will immediately file for limitation of liability.

At the same time, all third parties who have suffered damages as a result of the incident will file suit against the owner - not being able to sue the terrorists directly.

The court will have to determine whether the owner is eligible to limit liability. One of the steps in that process will be an analysis of whether the ship was in com- pliance with all applicable laws and regu- lations. There is a high likelihood that, if the ship has not submitted a vessel securi- ty plan to the U.S. Coast Guard for review, as required by the MTSA, the owner will not be allowed to limit liability. This means, in effect, that the owner has wagered its entire company on the out- come of the litigation. (Continued on page 95)

QUEENS HIGHWAY, FREEPORT HARBOUR • P.O. BOX F-44867

FREEPORT, GRAND BAHAMA • BAHAMAS • 242-352-7711 • FAX: 242-352-7695

WEB: www.bradford-grand-bahama.com • EMAIL: [email protected]

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