Incident Notification & Investigations

by Baker Donelson

Following on this week’s series regarding the new batch of four USCG-BSEE MOUs, this post will discuss the third, concerning incident reporting.

Hand in glove with the civil penalties and SEMS/SMS MOUs (the latter to be discussed in the last post in this series) – each of which focuses on specifically divvying up the shared regulatory spaces between the USCG and BSEE – the agencies have made an effort in the third of the January 2017 MOUs to formalize the in-the-field application of these newly divvied-up responsibilities by formalizing each agency’s incident investigation responsibilities. 

43 U.S.C. §1348 authorizes both agencies to investigate OCS incidents, with BSEE having specific authority for incidents involving systems related to drilling, completion/work over, production, pipelines and decommissioning work, as well as reports of unsafe working conditions on these assets; and with the USCG responsible for marine related casualties.

This MOU recognizes what has been a front-and-center overlapping jurisdiction problem since Macondo: “While BSEE and the USCG have separate regulations which cover OCS operations and incidents, there is significant overlap in these regulations” and “it is prudent that each organization share reports of incidents and coordinate investigative efforts regarding OCS facilities.”  Accordingly, this MOU establishes (through another matrix) specific incident types, and/or specific facilities/vessels/system, for which each agency will have primary reporting/investigative responsibility (with appropriate coordination from the secondary agency).  Likewise, the MOU encourages joint initial response (i.e. investigators from each agency) to reported incidents, as well as joint coordination of any future rulemaking by either agency with respect to incident reporting/investigations.

Again acknowledging the fact of overlapping regulatory authorities, the MOU also explicitly recognizes that pursuant to the various system/subsystem/facilities matrices established in this Incident Notification MOU and prior MOUS (including the SEMS/SMS MOU discussed in an earlier post on the second MOU in this series), many incidents will involve multiple systems/subsystems that will fall under both agencies’ allocated responsibilities.  In such situations, the USCG and BSEE will follow one of the following protocols: (1) one agency will be designated the lead investigatory agency, and will produce the final incident investigation report, with assistance as needed/requested from the other and with a comment period from the non-designated agency before the final report is issued; or (2) each agency will conduct its own independent investigation and issue its own report, again with a comment period prior to release of either report.

Curiously, although this MOU purports to cover “Incident Notifications and Investigations,” the document does not give any indication as to whether a report of an incident/condition to one agency will require separate/redundant notification to the other.  For example, would a dynamic positioning incident (i.e. a vessel losing DP and alluding with a rig/platform) reportable to the USCG under the reporting matrix on a USCG 2692 form also require separate incident report to BSEE under 30 C.F.R. §250.186 et seq.?  The answer would appear to be that notification to the lead agency under the matrix should be sufficient, especially under the MOU’s broad goal of information sharing between both agencies.  This outcome would likewise be consistent with prior rulemaking, in which the Mineral Management Services (MMS), BSEE’s predecessor, explicitly confirmed that BSEE would “allo[w] . . . operator[s] to submit USCG forms where they contain all the information required in” the BSEE reporting regulations. 71 Fed. Reg. 19640-01(Apr. 17, 2006).

Nonetheless, given that both the USCG and BSEE regulations would otherwise mandate reporting of (to follow the above example) (a) “[a]n occurrence causing property-damage in excess of $25,000” (USCG, 46 C.F.R. §4.05-1) by the vessel owner/operator and (b) “collisions that result in property or equipment damage greater than $25,000” by the OCS lease holder/permitted operator (BSEE, 30 C.F.R. §250.188), the vessel interests and OCS lease interests would be well advised to report separately to the USCG and BSEE, respectively.  Moreover, given that both agencies continue to have potentially overlapping regulatory authority with regard to specific regulations covering specific systems (including arguably the DP systems,  referenced in this example, as discussed previously on this blog), dual reporting under the regulations – even if potentially redundant – seems prudent.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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