If he is 16, neither he nor his friends are driving, no fighting (at least, nothing major), and no unprotected sex... well, everyone says "dont go past your limits", but you need to find them first. And the best way to find them is to do it in a reasonably safe enviroment.
I wouldnt have a problem if my brother did that at 16 (ok, except for the 99 bananas part). But then again, I grew up in a stereo-typical Irish family, so YMMV. My dad got me drunk well before being 16. People might think thats wrong, but when I got to college I knew how to handle my liquor, and what to do and not to do while drunk. I did much better than my friends who had never been drinking much before in their lives.