GUIDELINES ON THE RECOGNITION OF ORGANIZATIONS ACTING ON BEHALF OF THE ADMINISTRATION IN THE IMPLEMENTATION OF THE ISM CODE FOR PHILIPPINE SHIPPING COMPANIES AND THEIR SHIPS

Pursuant to the provisions of Presidential Decree No. 474 and
Executive Order Nos. 125/125-A, Memorandum Circular Nos. 122 and 143,
the Maritime Industry Authority hereby adopts the following policies,
guidelines and procedures on the recognition of organizations that will
be authorized to perform certification in compliance with the provisions
of the International Safety Management (ISM) Code for Philippine
shipping companies and their ships in accordance with Chapter IX of the
International Convention for the Safety of Life at Sea (SOLAS), 1974, as
amended, International Maritime Organization (IMO) Resolution A.739
(18), Guidelines for the Authorization of Organizations Acting on Behalf
of the Administration, and its annexes and appendices, and Resolution
A.788 (19), Guidelines on Implementation of the International Safety
Management (ISM) Code by Administrations, and its annexes and
appendices.

I. PURPOSE

This Circular aims to provide the policies, guidelines, and
procedures on the recognition of organizations acting on behalf of the
Administration to perform certification in compliance with the
provisions of the ISM Code. It also aims to define the minimum
conditions and specific requirements for all organizations applying for
said recognition.

II. COVERAGE

This Circular shall cover all entities that will apply for and those
that have been granted recognition by the Administration in order to be
able to perform certification in compliance with the ISM Code.

III. DEFINITION OF TERMS

For the purposes of this Circular, the following terms shall have the definitions and meanings attributed to them to wit:

3.1       INTERNATIONAL SAFETY MANAGEMENT (ISM) CODE means
the International Safety Management Code for the Safe Operation of
Ships and for Pollution Prevention as adopted by the IMO in Resolution
A.741(18);

3.2       ADMINISTRATION refers to the Maritime Industry Authority (MARINA);

3.3       RECOGNIZED ORGANIZATION (RO)
refers to an organization authorized by the Administration to perform on
its behalf the ISM Code certification for Philippine shipping companies
and their ships;

3.4       ISM CODE CERTIFICATION refers to
the issuance of the Document of Compliance (DOC) to a company and the
Safety Management Certificate (SMC) to a ship of the company which
involves verification carried out at the request of the company to the
Administration or the ROs;

3.5       ISM CODE CERTIFICATION SCHEME refers
to the system of a company which includes policy, rules of procedures,
instructions and management for carrying out ISM Code Certification;

3.6       VERIFICATION OF COMPLIANCE WITH THE ISM CODE
refers to the systematic and independent examination of the safety
management system of a company and its ships to determine whether the
policy, procedures and instructions are carried out effectively;

3.7       COMPANY refers to any
shipowner/operator/manager, bareboat charterer and any other entity who
has assumed the responsibility for the operation of a Philippine
registered ship(s) and who on assuming such responsibility has agreed to
take over all duties and responsibilities imposed by the ISM Code.

IV. GENERAL PROVISIONS

4.1       Only organizations which have secured
authorization/recognition from the Administration in accordance with
this Circular shall perform services relative to ISM Code certification
for Philippine shipping companies and their ships;

4.2       All organizations including existing ROs shall be required
to submit to the Administration the documentation requirements in
accordance with this Circular ;

4.3       All Philippine shipping companies shall have access to the
services of the ROs. The procedures under which the ROs operate shall
be administered on a non-discriminatory manner;

4.4       In order to safeguard the independence and integrity of
the certification process, ROs involved in ISM consultancy work shall
ensure that no conflict of interest exists in the delivery of
consultancy services, ownership/principals and others relative to
certification activities;

4.5       ROs shall carry out verification of compliance of
Philippine shipping companies and their ships in accordance with the
provisions of the ISM Code;

4.6       ROs shall immediately furnish the Administration copies of all audit reports and certificates issued;

4.7       ROs shall allow representatives of the Administration to
participate in further developing/enhancing their ISM Code certification
guidelines.

V. CONDITIONS FOR RECOGNITION

5.1       General Qualifications

5.1.1 The organization to be recognized shall have adequate
resources, in terms of technical, managerial and research capabilities
to conduct ISM certification in accordance with the Minimum Standards
for ROs acting on behalf of the Administration as set out in the Annex
and Appendix 1 of Resolution A.739 (18) and as amplified in the
procedures that the Authority shall promulgate.

5.1.2 The organization to be recognized shall meet the standards
on ISM Code Certification Arrangements as embodied in the Annex and
Appendix 1 of Resolution A. 788 (19).

5.1.3 In the case of a foreign established organization, it shall
have a duly appointed local representative which shall be established
under Philippine laws.

5.2       Documentary Requirements

5.2.1 Letter of intent/application;

5.2.2 A Code of Ethics by which the Organization’s ethical
behavior is governed with respect to assurance of adequate performance
on services, confidentiality of information, and independence between
the personnel providing consultancy services and those involved in the
certification procedure;

5.2.3 ISO Certification or IACS Quality Assurance Certification;

5.2.4 Directory of personnel to be involved in the ISM
Certification, representing an adequate geographical coverage and local
representation at least in major international and national ports;

5.2.5 Documented system for qualification and continuous updating
of the knowledge and competence of personnel (inclusive of theoretical
training courses covering all the competence requirements and the
appropriate procedures connected to the certification process, as well
as practical tutored and documented evidence of satisfactory completion
of the training); and

5.2.6 Documented system in conducting ISM Certification, inclusive of procedures and instructions for the following:

5.2.6.1 contract agreements with Companies;
5.2.6.2 planning, scheduling and performing verification;
5.2.6.3 reporting results from verification;
5.2.6.4 issuance of DOC, SMC and interim DOC and SMC; and
5.2.7.5 corrective action and follow-up of verifications, including actions to be taken in cases of major non-conformity.

VI. RECOGNITION PROCEDURE

6.1       The application for recognition shall be filed with the
Administration in writing, and shall be supported with the documents
prescribed under section 5.2;

6.2       The application shall be filed by the organization through its duly authorized representative;

6.3       The application shall be officially received only upon completion of the relevant requirements under this Circular;

6.4       The Administration shall verify that the relative size,
structure, experience and capability of the organization applying for
recognition is adequate for conducting ISM certification;

6.5       The Administration shall verify that the organization is
able to document extensive experience in assessing the design,
construction and equipment of merchant ships, and, as applicable, their
safety management systems prior to recognizing new organizations;

6.6       The Administration shall conduct an initial audit of the
applicant’s certification procedures prior to recognizing new
organizations. Upon successful audit, the Administration shall, after
securing MARINA Board approval, sign an interim agreement with the
organization for a period of one (1) year prior to the signing of a
final Memorandum of Agreement (MOA); and

6.7       The Administration reserves the right to verify the ROs’ continuous compliance with the provisions under the MOA.

VII. SUSPENSION/WITHDRAWAL OF RECOGNITION

7.1       The Administration shall, after due investigation,
suspend/withdraw the recognition granted to an RO relative to ISM Code
Certification activities, based on the following grounds:

7.1.1 Failure to maintain any of the conditions for recognition in Section V hereof;
7.1.2 Willful or gross violation of any rule/regulation and of any
of the general and specific terms and conditions of recognition.

VIII. REPEALING CLAUSE

All memorandum circulars, rules and regulations and other issuances
inconsistent herewith are hereby amended, repealed or modified
accordingly.

IX. EFFECTIVITY CLAUSE

This Memorandum Circular shall take effect upon publication once in a newspaper of general circulation.

Adopted: 16 Dec. 1999

(SGD.) AGUSTIN R. BENGZON
Administrator