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Oil Spill India 2016

12 August 2016, Day 2 1415 – 1515 Technical Session vii, Salvage and Wreck Removal

The role of the salvor in countering marine pollution

Amit Wahi, International Salvage Union Salvage sub-Committee Member, Mubarak Marine

[Title Slide]

Introduction

Marine salvors are professional, well-equipped operators who stand ready to intervene in marine casualty situations around the world. The International Salvage Union is the trade association which represents marine salvors – it is the sole global voice of the industry and is recognised by, among others, the International Maritime Organisation, the International Group of P&I Clubs, the International Union of Marine Insurance and the international Chamber of Shipping.

ISU has some 60 full members who must demonstrate capability and experience of marine salvage cases and some 80 associate and affiliate members.

The full members range from large scale global operators through to regional players and smaller organisations focused on just one territory.

Countering marine pollution is facilitated by the people, skills, equipment and innovation of the professional salvor but that will only be effective if the commercial framework, contracting regime and behaviour of the authorities supports and encourages that role.

Changed priorities

[Slide: casualty/pollution image of Eagle Otome, Houston.]

Every marine casualty presents the possibility of a threat to life, to the marine environment and the possibility of loss of property.

It is the role of the commercial salvor to intervene and to prevent such loss and damage. Historically the first priority has always been to save life. The next priority was to save property – the ship and its cargo – and the third priority was then to prevent damage to the environment.

In recent decades as society has become more environmentally conscious the priorities have changed. Saving life, of course, remains the first priority but now protecting the marine environment comes before saving property. It is hard to conceive of a situation where the relevant authorities would be prepared to sacrifice the environment in favour of protecting the property of third parties.

It is in the context of these changed priorities that the modern marine salvor must operate, and must be commercially viable.

ISU pollution prevention statistics

The ISU conducts and annual survey of its members’ impact in helping to prevent marine pollution. In 2015 ISU members provided 185 services to vessels carrying nearly 2 million tonnes of potentially polluting cargoes. That statistic alone is a clear demonstration of the value of the salvors’ work in protecting the marine environment.

Shipping is much safer than it was even twenty years ago but everyone in the industry should be aware that just one major casualty could cause an environmental catastrophe. In many cases it is only professional, commercial salvors who are able to intervene and prevent that catastrophe from occurring.

[Slide: ISU pollution prevention statistics]

In 2015 ISU members salved vessels carrying:

66,000 tones of bunker fuel

666,000 tones of oil cargoes (both crude and refined products)

36,000 tones of chemicals

722,000 tones of polluting or hazardous bulk cargo

21,000 teu containers

65,000 tones of “other” pollutants

The total is 1.9 million tonnes.

ISU has conducted its annual pollution prevention survey since 1994. In the period 1994 to end-2015, ISU members salved 22 million tonnes of potential pollutants, an average of more than one million tonnes per year.

ISU is careful to point out that not all of the salved cargo noted in the survey was at imminent risk of going into the sea. But even with a relatively simple rescue tow it is worth considering what the consequences might be if there was no commercial provision of salvage services.

Contracts/“best endeavours”

[Slide: image of IMO Salvage Convention]

Pollution prevention is underpinned by the legal framework for salvage which has evolved over centuries. Traditional contracting models in marine salvage have encouraged salvors to go the aid of a casualty vessel at their own financial – and physical – risk. It is an approach supported by the 1989 Salvage Convention. Salvors perform the required services under the principle of “no cure, no pay.” If they are successful then the natural equity is that they should receive an award for their efforts based the value of the property, both ship and cargo, saved from loss and considered in the light of the type of operation and the prevailing conditions. Under this model salvors are encouraged by the prospect of a reward which not only pays them for the job but includes an element to ensure that equipment and salvage assets are available when needed.

LOF/SCOPIC

[Slide: image of LOF contract]

The most commonly used emergency response contract is Lloyd’s Open Form which, in various editions, has been used for more than 100 years. It s a “no cure, no pay” contract but it expressly requires the salvor to use their “best endeavours” while performing the services “to prevent or minimise damage to the environment.” The reward for this is bound up in the general award made under Article 13 of the Salvage Convention and there has been discussion in recent years between salvors, lawyers and insurers about whether there should be a more specific award for environmental salvage but the idea was not taken forward.

The concept of no cure, no pay was thought not to encourage salvors to intervene in low value cases which nevertheless posed a threat to the environment. That was tackled by the introduction of the so called “safety net” of the Salvage Convention’s Article 14. In practice, Article 14 was found to be cumbersome and while it is still in place it has, for all practical purposes, been replaced by the Special Compensation P&I Club Clause – always known as SCOPIC – which can be incorporated into any LOF contract and invoked by the salvor according to their judgment.

The point of the SCOPIC clause is to enable the salvor to be paid on a time and materials basis for their efforts when the chances of success are limited or the values involved are low but there is threat to the environment perhaps from the bunkers or the vessel itself. SCOPIC is thought to have worked well since its introduction in 1999. It protects the salvor from wasted expense and provides the third party liability insurers with a service that will, hopefully, save them from huge claims for environmental damage if there was no intervention.

It could be argued that SCOPIC is one of the key ways in which salvors are enabled to protect the environment and counter marine pollution.

Coastal states requirements/command and control/Places of Refuge

[Side: image of MSC Flaminia – example of failure to grant Place of Refuge – fire in the Atlantic: discussions with UK; France and others. Weeks before admitted to German port.]

The regime, behaviour and requirements of the relevant coastal state authorities is also critical in facilitating – or otherwise – the countering of marine pollution. Salvors like certainty and clear command and control without political interference. They are often the only resource available with the necessary capability to salve the vessel and prevent pollution. In short, while they wish to be collaborative, they also want to be left to get on with the job without delivering unnecessary requirements. They also want to proceed without fear of being criminalised for their actions. And the authorities must not see the casualty as a way of generating income.

In countering marine pollution one of the most important issues can be the granting of a place of refuge. ISU recognises that the risk of pollution cannot be completely eradicated and that bringing a casualty into port or another place of refuge could run the risk of pollution. But it is a given that casualties do not improve with age and if the salvor needs a place of refuge to stabilise the casualty or conduct temporary repairs it should be granted. There are too many examples of the authorities refusing such requests although the European Union has recently done good work to implement a set of operational guidelines on places of refuge which ISU has welcomed. Offering a place of refuge in some circumstances could be the single most important contribution to countering marine pollution.

Equipment/technology and innovation

[Slide: image of Smit Kyung Shin (offshore Korea) fuel recovery system]

Salvors are innovative problem solvers who have shown time and again an ability to deal with the most complex engineering difficulties. Removing polluting cargo and bunker fuel from wrecks lying at great depth, for example, using customised “hot tapping” equipment or undertaking ship to ship transfer of Liquified Natural Gas at extreme low temperatures.

One of the biggest challenges is handling the new classes of mega ships – LNG carries, bulkers, cruise liners and boxships. Handling cargo from damaged containerships is very difficult particularly if there is structural damage to the cells. All containers are, broadly, considered harzardous: if they break loose they are a threat to navigation and contents may be hazmat. There is also the serious risk of mis-declared cargo. Various propriety systems are under development for the discharge of boxes from containership casualties. Undoubtedly a major containership casualty is a concern to salvors and insurers and is a real threat to the marine environment.

Conclusion

The marine salvor is therefore central in countering marine pollution: in the modern world it is, in effect, their job. With the exception of some state-funded Emergency Towing Vessels and international oil spill response organisations it is only the professional salvors who have the equipment and capability to intervene successfully to prevent or contain pollution. They are innovators and many invest in new equipment and techniques but to be effective they need to operate in the context of a supportive contracting environment and with coastal state authorities’ regimes which enable them to perform at their best.