Compliance with the ISM Code is no longer just a matter of ticking boxes to satisfy auditors. For U.S.-flagged vessels and companies operating in regulated maritime sectors, staying compliant is essential to maintaining operational continuity and avoiding costly penalties.
The U.S. Coast Guard (USCG) plays a central role in enforcing compliance with the ISM Code through Flag state audits, Port State Control (PSC) inspections, and other monitoring measures. Despite good intentions, many companies still face detentions, fines, and revocation of certificates. Often not due to bad practices, but due to gaps in implementation and a disconnect between policy and practice.
Let’s explore how the ISM Code and USCG (Flag State and Port State) interface, what compliance really means in practice, and how to build a safety management system (SMS) that delivers beyond documentation.
What Is the ISM Code and Who Must Comply?
The International Safety Management (ISM) Code is a safety framework adopted under SOLAS Chapter IX. Developed by the International Maritime Organization (IMO) in response to a growing need for uniform safety management, it requires companies to establish and implement a Safety Management System (SMS). The SMS must ensure compliance with applicable regulations, promote safe ship operation, and drive continuous improvement in pollution prevention and crew safety.
The ISM Code applies to:
- U.S.-flagged vessels operating in international trade
- Domestic vessels, including towing and passenger vessels under Subchapter M or other regulatory pathways (as an optional means of compliance
- Shore-based management, including Designated Persons Ashore (DPAs) and company safety departments
While the ISM Code originated from international conventions, U.S. operators are directly accountable through the USCG, which acts as the prime agency representing the Flag State Administration for the United States and enforcer of these international obligations.
U.S. Coast Guard Oversight and Enforcement Role
The USCG is responsible for ensuring compliance with the ISM Code for U.S.-flagged vessels, domestic operators and foreign vessels operating in US waters. This includes:
- Conducting port state control (PSC) inspections
- Issuing or renewing Document of Compliance (DoC) for companies
- Certifying ships with Safety Management Certificates (SMC)
- Reviewing SMS implementation and effectiveness
- Publishing guidance such as NVIC 02-13, which outlines expectations for compliance
Additionally, applicable CFRs (Code of Federal Regulations) and U.S. Code provides the legal interpretation of ISM provisions as they apply in the U.S. maritime sector. The USCG evaluates not only whether a system exists, but whether it is functioning as intended, both ashore and on board.
Common Compliance Pitfalls That Lead to Detentions or Fines
Despite having certified systems in place, many companies still fall short during audits and inspections. Here are common issues that QMII has encountered:
- SMS not being lived on board
One of the most frequent causes of detention is a clear disconnect between the documented SMS and actual practices on the vessel. Crew unfamiliar with procedures, drills, or roles during emergencies is a major red flag. - Ineffective internal audits
Treating audits as a formality, rather than a tool for learning, leads to blind spots. Many companies miss critical non-conformities due to poorly planned or poorly executed audits. - Inactive or under-engaged DPAs
The Designated Person Ashore plays a central role in monitoring and supporting the SMS. If the DPA is disconnected from shipboard reality, non-conformities go unaddressed and leadership loses visibility. - Failure to correct non-conformities
Repeat deficiencies often stem from weak root cause analysis or superficial corrective actions. A missed opportunity to learn often leads to larger failures down the line. - SMS not updated to reflect regulatory changes
The regulatory landscape is dynamic. Systems must be regularly reviewed to align with new requirements, such as amendments to MARPOL Annex VI or ballast water management standards.
Each of these pitfalls reflects a broader truth: a system that looks good on paper, but is not embedded in day-to-day operations, is a liability waiting to happen.
How to Build a Sustainable Safety Management System (SMS)
A truly effective SMS is more than documentation; it is a living system that evolves with operations, engages personnel, and drives performance. There is no direct correlation between the amount of documentation in a management system and the effectiveness of the system.
Here’s how to build one that stands up to scrutiny and improves outcomes:
- Conduct regular and meaningful internal audits
Audits should be independent, risk-based, and carried out by trained personnel who can objectively evaluate implementation. - Empower the DPA
The DPA must have direct access to top management and the authority to act. Their involvement in analyzing trends, facilitating communication, and conducting oversight is critical. - Ensure crew awareness and involvement
From drills to toolbox talks, crew engagement is essential. A safety culture isn’t imposed—it’s cultivated through participation and trust. - Monitor and respond to regulatory changes
Build a process for tracking new requirements and updating procedures accordingly. Your SMS should not fall behind the law.
Use root cause analysis tools
When things go wrong—or almost go wrong—use proven tools like the 5 Whys or Fishbone Diagram to get to the bottom of it, then verify that corrective actions are effective.
Financial, Legal, and Operational Risks of Non-Compliance
When ISM compliance is treated as a formality, the consequences are real and costly:
- USCG detentions and voyage delays
- Revocation of DoC or SMC, suspending commercial operations
- High daily fines per violation
- Loss of reputation, charter party disputes, or insurance premium hikes
Many companies only realize the true cost of non-compliance after the fact. But a proactive, well-implemented management system can prevent most of these risks before they escalate.
Conclusion
The ISM Code is not just about paperwork. It is about ensuring vessels are operated safely, sustainably, and in compliance with both international and U.S. maritime regulations. The USCG takes its enforcement role seriously, and vessel operators must as well. More than just for compliance or for passing an inspection/audit, the SMS should be implemented to achieve the objectives as laid out in clause 1.2 of the ISM code.
At QMII, we help companies close the gap between what’s written in the SMS and what actually happens on board. From ISM internal auditor training to DPA workshops and mock audits, we support clients in building systems that are functional, compliant, and culture-driven.
Need help preparing for a USCG inspection or aligning your system with the ISM Code?
Contact us at info@qmii.com or explore our training and consulting services at www.qmii.com.
