Owners and Operators – be SMS-aware! 

Marine Order 504, which has been in effect since May 2020, is a set of regulations implemented by the Australian Maritime Safety Authority (AMSA) to ensure the safety and wellbeing of workers aboard domestic commercial vessels and the boating industry generally, including ferries, cargo ships and fishing vessels, as well as charter boats and pleasure craft of varying sizes used for commercial purposes.

Marine Order 504 applies to all domestic commercial vessels operating within Australian waters and sets out the minimum requirements for the issue of certificates of operation under the national law for domestic commercial vessel’s including Safety Management System (SMS) requirements.

Commercial vessel operators are responsible for ensuring that a vessel meets the requirements set out in Marine Order 504 by carrying out regular inspections and implementing a SMS that covers all aspects of the vessel’s operation. Failure to comply with the regulations in Marine Order 504 can result in fines and licence suspensions.

Updated Marine Order 504

AMSA has recently implemented an updated Marine Order 504 (Certificates of operation – national law) 2024¹, which will take effect on 1 June 2025.

In summary, the updated Marine Order 504 contains amendments to vessel’s SMS requirements, including² (discussed in more detail below):

• simplifying SMS requirements for smaller, less complex vessels and operations;
• clarifying and strengthening fatigue management;
• enhancing the management of risks from drug and alcohol use;
• ensuring that roles and responsibilities for the safe operation of the vessel are clear;
• updating the assembly station requirements in the vessel’s emergency plan;
• aligning procedures for onboard operations and emergency preparedness with risk;
• addressing operational risks to vessel stability; and
• amending the certificate of operation renewal criteria to reduce administrative burden.

Simplifying SMS requirements for smaller, less complex vessels and operations

Simplified SMS requirements will become available for “lower complexity vessels” defined in the Order as Class 2³, 3⁴ and 4⁵ vessels that:

• are under 7.5m in length;
• for Class 2 vessels, do not carry more than 4-day passengers;
• do not carry dangerous goods;
• are free of lifting devices such as cranes or deck loads, which may impact stability;
• are free of an inboard petrol engine, berthed accommodation, or towage setups; and
• are not deemed unsuitable by AMSA for simplified SMS.

The simplification to the SMS requirements will include:

• designated person responsibility statements to be no longer required in circumstances where the vessel owner is also the designated person;
• master’s responsibility and authority statement to be no longer required in circumstances where the owner of the vessel is the master;
• a risk assessment to identify key daily tasks performed by the master and crew to be no longer required;
• owners are no longer required to specify assembly stations as part of their emergency plan; and
• mandatory details for the crew list to be reduced.

Clarifying and strengthening fatigue management

The risks associated with the physical and mental demands of seafaring are addressed in the amendments to Marine Order 504 with respect to all vessels, including lower complexity vessels eligible for simplified SMS.

To ensure a robust approach to fatigue management, the requirements for identification and management of master and crew fatigue in the SMS will be bolstered particularly by way of an SMS fatigue risk management plan, which is to consider factors beyond work and rest hours, such as night work, sleeping environments, and task demands.

Operators will create a fatigue management plan implementing a risk assessment addressing master and crew fatigue and how these risks will be managed. Operators will also need to consider whether the identified fatigue risks require other parts of the SMS to be updated, such as watchkeeping and lookout duties, crew induction and training on recognising and managing fatigue, procedures for breaks and adequate sleeping opportunities, maintaining a healthy shipboard environment.

Enhancing the management of risks from drug and alcohol use

Operators must include a drug and alcohol policy in the SMS in line with the size and complexity of a vessel’s operations, as the changes will impact the various classes of vessels differently.

For Class 1⁶, 2, and 3 vessels, owners will need to consider:

• alcohol and drug-related induction and emergency training;
• operational procedures on alcohol and drug use;
• competence standards and disclosure procedures for prescribed medications; and
• denial of boarding for impaired individuals.

For Class 4 vessels, owners will need to consider:

• induction training on drug and alcohol use, including handling impaired hirers/participants;
• expectations for acceptable use by staff, hirers, and participants;
• pre-departure testing and denial of boarding for impaired individuals;
• guidelines for onboard consumption by hirers/participants (if allowed); and
• passenger-carrying vessel operators must also consider passenger-related risks.

Operators that already have a drug and alcohol policy in the SMS must ensure that familiarisation with the policy is included as part of crew/staff induction and training on the reasons for having the policy and the risks associated with non-compliance.

Ensuring that roles and responsibilities for the safe operation of the vessel are clear

To ensure clarity in roles and responsibilities of owners, masters and designated persons, Operators will need to implement a ‘Designated Person’s Responsibility Statement’ for all vessels, including lower complexity vessels eligible for simplified SMS, outlining the designated person’s identity, contact details, and responsibilities (unless the vessel owner is also the designated person and their vessel qualifies for simplified SMS).

Operators will also need to implement a ‘Master’s Responsibility and Authority Statement’ for class 1, 2, and 3 vessels, clarifying the master’s authority in ensuring vessel, environmental, and personal safety (unless the vessel owner is also the master and the vessel qualifies for simplified SMS).

Updating the assembly station requirements in the vessel’s emergency plan

Class 1, 2, and 3 vessels ineligible for simplified SMS will have to review and update assembly station requirements in the SMS.

The key change for affected vessels is that alternative assembly station requirements will now only be necessary where practical based on the vessel’s layout, characteristics and risk assessment as opposed to being dependent on the number of persons carried on board the vessel.

Owners are to consider updating risk assessments and emergency plans to identify primary and alternative assembly stations (if practical) and include crew assignments, passenger safety procedures, and emergency drill schedules.

Aligning procedures for onboard operations and emergency preparedness with risk

The SMS of class 1, 2 and 3 vessels, including those eligible for simplified SMS, will have to include procedures for vessel operations outlining how high-risk operations will be managed including (among other things) vessel:

• start up and shutdown;
• mooring and berthing;
• bunkering and refuelling;
• means of access (embarking/disembarking);
• wearing life jackets;
• conduct of passenger counts;
• preparation and use of passage plans;
• confined space entry (for vessels with confined space); and
• cargo operations including the carriage of dangerous goods as cargo (if applicable).

Operators who identify risks in relation to the above areas will need to develop emergency preparedness procedures relating to these risks and include them in the SMS. The extent of procedures required to manage the relevant risks will need to account for the size and complexity of the vessel’s operation.

Addressing operational risks to vessel stability

In order to manage a vessel’s ability to return to its upright position after being heeled over by wind, waves, or other forces, the amended Marine Order 504 will require operators (other than those eligible for simplified SMS) to identify and manage risks to vessel stability within the SMS, in an effort to reduce the risk of the vessel capsizing. This may include vessel modification, overloading, accidental flooding or adverse weather conditions.

Operators of Class 1, 2, and 3 vessels, including those eligible for simplified SMS, will have to record any structural or operational modifications affecting vessel stability and ensure documentation of these changes are accessible for inspection on request.

Amending the certificate of operation renewal criteria to reduce administrative burden

AMSA has proposed changes to the certificate of operation (CoO) renewal criteria to reduce administrative burden on operators and improve safety outcomes for domestic commercial vessels.

The proposed changes aim to make the requirements for CoO’s easier to understand and more practical and include simplifying the requirements for smaller vessels and operations.

Next steps

In preparation for the amendments to Marine Order 504, Operators should, prior to 1 June 2025:

• consider whether their vessel classifies as a “lower complexity vessel” and eligible for a simplified SMS;
• consider whether the new requirements will impact their existing SMS;
• if appropriate, update existing SMS to comply with the new requirements; and
• ensure compliance with the updated Marine Order 504 standards by the commencement date on 1 June 2025.

This article was written by Matthew Brooks, Partner, Nic van der Reyden, Partner and Michael Valdes, Senior Associate.

¹ See MO504_Certificates of operation_national law_2024.pdf
² See Updated Marine Order 504 (Certificates of operation – national law) now available | Australian Maritime Safety Authority
³ Non-passenger vessels.
⁴ Fishing vessels.
⁵ Primarily for recreational hire by the public.
⁶Passenger vessels.