As your are aware, the ISM Code has been incorporated into the SOLAS convention. This has served to improve the effectiveness of the Convention, making it like the two wheels of a cart that ensure the support and improvement of the safety of ships from two sides: one based on conventional survey of the "hardware" of the ship and the other by new audits of the operational "software" of the vessel.
Under current regulations, classification surveys are carried out annually as "hardware" inspections, while ISM shipboard audits are conducted at an interval of 2 to 3 years. Consequently, the organization that has issued the SMC often is not aware of possible failures in the Safety Management System onboard the ship for a long period of time.
In order to rectify this unfavorable effect, IACS (International Association of Classification Societies) has been working to establish a system under which surveyors who become aware of possible safety management system failures during class or statutory surveys should report this fact to the classification society (or administration or other organization) which issued the SMC to the ship. In this regard, please be informed that ClassNK (hereinafter referred to as "the Society") has decided to follow the above scheme and will conduct the surveys specified below in addition to routine classification surveys from April 2002.

1. During annual, intermediate and special class survey, surveyors are to examine the functioning of the Safety Management System using a checklist (the content of which does not involve the techniques of a formal ISM audit). In the event that any of the facts listed below are found during such check, that fact will be reported to the Safety Management Systems Department of the Society. Further, if any of the items listed below are found during any other periodical class survey, occasional class survey, or statutory survey, the surveyor is to report such facts to the Society.
(1) Technical deficiencies for which no proper action has been taken by the Company (as defined in the ISM Code). Namely, when a deficiency is not reported to the Company; or there is no evidence to show any action taken by the Company to rectify a reported deficiency.
(2) Numerous technical deficiencies that indicate lack of effective maintenance of ship and equipment.
(3) Technical deficiencies that may lead to the suspension or withdrawal of Class or Statutory Certificates.
(4) Other conditions that may seriously affect the safety of the ship, personnel or the environment, even though such conditions in themselves may not be requirements of class or statutory regulations.
(To be continued)
(5) Certificates and other documentary deficiencies.
(6) Operational unfamiliarity or failure relating to the survey.
(7) Other requirements of class or statutory regulations that are not being observed.

2. The Society shall act as follows upon receipt of the above report from surveyors.
(1) In event that the ship is in possession of an SMC issued by an organization other than the Society, the Society shall notify the fact to the organization having issued the SMC.
(2) In event that the SMC possessed by the ship has been issued by the Society, the Society may request the company to undergo an Additional Audit for the said ship; and
(I) When the DOC has been issued by the Society, the Society may request the company to undergo the Additional Audit for the company, as well as other ships managed by