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Salvage, safety, the regulatory environment and protection for the salvor

Corrado Neri, Executive Committee Member, International Salvage Union

Paper for 9th International Maritime Conference 13 October 2016

Piraeus Bar Association

Synopsis

Saving life is well-established as the priority in salvage operations. There has been a shift in recent decades to protection of the environment as the next priority ahead of saving property. This presentation will consider the role of the salvor in ensuring operations are conducted effectively and safely and will consider the impact of different regulatory environments in that. It will also consider the protection, or otherwise, that salvors may have from criminalisation as a result of their actions.

Introduction

Ladies and gentlemen thank you for giving the International Salvage Union the opportunity to speak at your conference. With great regret our President, John Witte, who was due to give this talk is unable to be here. Mr Witte runs Donjon Marine, an American marine services and salvage company. As you may know there has recently been a severe hurricane in the southern part of the United States and Mr Witte has been required by the US Navy to help manage the aftermath of the hurricane. I am a member of the ISU Executive Committee and I am pleased to be able to give the speech on behalf of Mr Witte.

Co-operation between the salvor, the authorities and the shipowner and their insurers is vital for a successful salvage and should begin at first notification of a casualty.  Co-operative efforts, and effective public and private cooperation rather than conflict can go a long way towards mitigating the potential for environmental damage and pollution; damage to the vessel or its cargo and, most importantly, prevent loss of life or injury to the crew.

A timely response is essential. Any delay may mean losing a narrow window of opportunity to prevent pollution and even injury and death. Clear command and control with the salvor making appropriate operational decisions is the key to success.

Today’s salvages tend to be more expensive and technically complex, compared to those in the past.  This is, in large measure, due to the increased size of vessels, increased values of their cargo and external influences such as demanding requirements from governmental organizations, environmental groups and the shore-based authorities.  Coastal States are vigorous in protecting their waters and often become intimately involved in aspects of the salvage service.  The salvor is often at the mercy of these influences which can translate into delay and poor decision making. In the worst cases salvors are exposed to unfair criminalisation which must be detrimental in the long run to the provision of these vital services around the world.

“Best endeavours” and changed priorities

ISU believes that in many emergency response situations, Lloyd’s Open Form – usually known as “LOF” – is still the most appropriate salvage contract and it has been in use for more than 100 years. The 1989 Salvage Convention imposes a requirement for the salvor to use his “best endeavours” to save the property and to prevent or minimise pollution damage while engaged in salvage operations. That same requirement of “best endeavours” is also at the heart of LOF.

And this must take place in a world that has adopted a virtual “zero tolerance” attitude to marine spills. Major spills are now a relatively rare occurrence, but they do still occur. One of the salvor’s main roles is to stop this happening: safely removing or containing pollutants to prevent an emergency turning into an environmental disaster.

The ISU conducts an annual survey of the amount of pollutants salved by its members. Over the past 20 years ISU salvors have conducted operations involving more than 20 million tonnes of oils, chemicals and other pollutants from over 3000 ship casualties.

In 2015 ISU salvors were involved in 185 services in which 1.8 million tonnes of potential pollutants were salved. We do not say that all of that material was at immediate risk of going into the sea but it is interesting to pose the question what would have happened in those cases if there were no global salvage industry?

To a large extent we have seen the entire focus of salvage activity change over the last 30 years with pollution defence now invariably taking priority over property salvage. And that of course helps to reduce the exposure of the liability insurers. The cost of salvage seems very modest when compared to the eye watering expense that a major spill will incur.

Shore-based authorities and places of refuge

Of course salvors do not achieve their successes in isolation. The outcome of many operations will depend on effective and efficient cooperation with many parties, including the authorities ashore who have a crucial role in managing the overall requirement and representing the needs of their people; approving plans and so on.

There are a multitude of conventions, guidelines, national response plans, rules and regulations which become relevant in any casualty situation. And there are practical issues like equipment being delayed by customs or access to the ship being blocked or impeded. In some parts of the world, unreasonable financial demands may be made.  All of which can prevent or hamper a successful outcome.

In most cases the aim is to help the coastal state and all other parties to swiftly identify the best environmental option. The threat, or reality, of pollution will almost certainly generate acute political problems and sensitivities – at regional, national and, sometimes, international level, and almost certainly there will be tension between central and local government. These pressures are obviously most acute in the coastal communities which bear the brunt of the problem when pollution occurs or threatens.

Places of refuge

I turn now to an operational issue in which the record of the international and national authorities is poor. It is the matter of providing a place of refuge to a casualty vessel. Shipowners, salvors and insurers – through their respective trade associations – have jointly and forcefully called for the prompt and proper implementation of international measures to provide a place of refuge for stricken vessels, following a series of incidents like the Maritime Maisie (South Korea) and the MSC Flaminia Atlantic/Europe).

All parties recognise that this is sensitive and that the risk of pollution from casualties cannot be completely removed. They also recognise that decisions about handling casualty vessels carry political implications and may impact coastal communities. At the same time, failure to offer a suitable place of refuge may prevent successful salvage intervention: the casualty’s condition may worsen and ultimately lead to pollution that might otherwise have been prevented, and that pollution may affect a wider area than need have been the case.

There is significant relevant legislation in place internationally and regionally and ISU is not seeking further instruments. This year the European Union introduced a set of Operational Guidelines for Places of Refuge and they have been used in practice several times with the feedback from salvors being positive. The EU is to be congratulated on this work which the ISU was closely involved with. We hope that the EU will now take an international leadership position on the issue of Places of Refuge and encourage other states to improve their attitudes to vessels in distress.

Regulatory environments

Salvage operations are conducted under mix of international conventions; common law; the jurisdictions of the key coastal states as well as regional and local regulations and laws. It is in not possible here to try to make widespread comparisons but let us consider three regimes.

In the US, salvage operations are governed by the Oil Pollution Act 1990 – universally known as OPA 90 – and its associated regulations. The key elements are the requirement for vessel operators to have named, appropriately qualified salvors available to intervene if necessary as part of the Vessel Response Plan and second, the command structure during an incident.

The requirements are detailed and prescriptive and only a small number of operators have chosen to meet the requirements as salvage and firefighting resource providers and they must have personnel and equipment on permanent notice to move to an incident as required.

The command structure flows from the US Coast Guard under the Captain of the Port Zones. The USCG maintains control and may direct operations with a Federal On-Scene Coordinator in almost all circumstances. The Incident Commander will work alongside the Qualified Individual who acts on behalf of the vessel operator from within a Unified Command structure. This system is designed to ensure all parties are working cooperatively to the same plan but gives operational decision making and approvals to the Coast Guard.

In contrast the situation in the EU is not as prescriptive as in the US. Several EU states have state-funded Emergency Towing Vessels available to make interventions but, generally, commercial salvors are relied upon to provide first line emergency response.

The UK is considered to have a robust regime for managing salvage in which political influence is removed by the delegation of power from the Secretary of State for Transport to a named representative (the so-called, SoSREP) who has sole responsibility for decision making with regard to emergency response and wreck removal operations. SoSREP has wide ranging powers of intervention that exceed the power of the Secretary of State. It may be the case that other states have not adopted such a bold approach because it is difficult to accept the idea of a lower grade civil servant having more powers than a government minister.

Likewise, the regime in Australia is considered to be robust but relies on commercial arrangements made by shipowners. One important component of this regime is a tiered provision of emergency towing capability. Intervention and direction is based on the role of the Marine Emergency Response Commander – MERCOM – who has a high degree of authority to coordinate and manage serious maritime incidents without political interference.

Criminalization

In considering the various regimes around the world, criminalization following marine incidents is a real concern. ISU believes this disturbing trend is counter-productive and in direct conflict with the goals of safer ships and cleaner seas. There are close links between the issues of criminalization and lack of responder immunity for salvors and other emergency responders.

The maritime community has experienced some harsh lessons in the area of criminalization in recent years with the conviction in Spain of the Master of the Prestige and the detention in Pakistan of seven crew members – and the contracted Salvage Master – from the Tasman Spirit.

There has been no real progress on responder immunity in the past decade. For example, IMO member governments rejected responder immunity when adopting the Bunker Spills Convention. This was a serious setback for salvors, as the removal of bunkers is the first priority in many salvage operations. Salvors deal with problems that are not of their making and they are usually the only source of the equipment and expertise required to prevent spills when ships get into trouble.

Governments may well pay a stern price for creating a climate of fear through threat of criminalization and lack of immunity which do nothing to encourage the kind of swift, decisive response which can prevent pollution costing billions of dollars.

The former IMO Secretary-General, Efthimios Mitropoulos was on record saying: “Criminalization of individuals caught up in major spills might jeopardise effective response to an incident. It might lead to fear and indecision at crucial times. If action is taken against salvors, indecision or inactivity may be further extended as third parties and other agencies may be unwilling, or at least hesitant, to respond to an incident. Criminalization may end up depriving us of the services of those agencies who may play an instrumental role in preventing accidents and, once they do happen, in mitigating their impact on human life and the environment.”

In Europe, the EU’s Directive on Ship-Source Pollution also causes real concern. This allows for criminal sanctions against Masters, owners, charterers, managers of port authorities and classification societies and, presumably, Salvors.

ISU is not seeking to excuse negligence but it believes it is possible to identify three principles which should be beyond dispute, regardless of the specifics of a particular case.

Seafarers should not be used as pawns by politicians. Marine accidents should not be treated as commercial opportunities. Governments should meet their own obligations in areas such as places of refuge and compensation.

Conclusion

Conducting effective salvage operations in is increasingly complex not least because of the demanding requirements of the may coastal authorities who have a role to play. Rightly, after the saving of life, environmental protection is now a higher priority than saving property and commercial salvors – members of the ISU – are usually the only agents with the necessary skills, experience and assets to make a successful intervention. It is wrong that people who have chosen to put themselves in harms way – yes for commercial gain – should nevertheless in may cases also be exposed to the threat of criminalization for their actions. It does not promote the kind of cooperative spirit that is required for successful outcomes.