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Wreck removal

The majority of coastal states require a wrecked vessel to be removed and for the shipowner and his liability insurers to pay for the removal. This is certainly the case if the vessel poses a threat to the environment or is a hazard to navigation. ISU members have the expertise and heavy equipment required to undertake the most complex of wreck removal operations. These essential “wet salvage” services include dealing with the aftermath of marine calamities, removing pollution threats and clearing hazards to navigation.

Wreck removals usually require the mobilisation of some of the heaviest units in the world salvage fleet, including floating sheerlegs and cranes, pullbarges and a vast array of specialised equipment.

During the period 2000-2015, ISU salvors performed over 1,200 wreck removal operations including 564 operations in 2005 as a result of Hurricanes Katrina and Rita in the US Gulf. Wreck removal revenue has become the major source of revenue for ISU members overtaking LOF revenue in the last few years.

There has been a trend over the last 10 years, 2006-2015, for wreck removal operations to significantly increase in cost. As an example, in 2004 total revenue for ISU members for wreck removal was US$32 million. The average revenue for the 3 years 2013-2015 was in excess of US$400 million. This led to a study undertaken by the International Group of P&I Clubs which concluded that the major cause of the increase in cost is the increasing demands of national authorities. These demands were very apparent during the wreck removal of the ‘Costa Concordia’ off Italy which cost in the region of US$1.3 billion and the wreck removal of the ‘Rena’ off New Zealand which cost in the region of US$450 million.

The ‘Costa Concordia’ wreck removal, 2012-2014, was the largest, most expensive wreck removal ever undertaken. It significantly raised the profile of the international marine salvage industry and set new standards for technical competence in wreck removal operations. Running concurrently was the wreck removal of the container ship ‘Rena’ off the North Island of New Zealand. Technically challenging due to its exposed location the remains of the wreck have been left following removal of all environmental hazards and reduction of any threat to navigation.

Standard contracts for wreck removal

In conjunction with shipowners, the International Group of P&I Clubs and under the stewardship of BIMCO, the ISU was heavily involved in the development of a series of standard contracts for the performance of wreck removal services. First introduced in 1999, the BIMCO WRECKFIXED, WRECKSTAGE and WRECKHIRE contracts were revised and updated in 2010. These contracts are in common and widespread use and provide a model for the negotiation of contracts which balance the interests of all parties involved in a wreck removal operation.

Wreck Removal Code of Practice

The ISU and the International Group of P&I Clubs are parties to a Code of Practice for wreck removal/cargo recovery operations. The P&I (Protection & Indemnity) Clubs are responsible for shipowners’ third party liabilities, including wreck removal obligations and pollution-related claims. This Code, amongst other things, sets out formal procedures for tendering for wreck removal projects.

Nairobi Wreck Removal Convention 2007

The ISU participated in the International Maritime Organization’s work to develop a new International Convention on Wreck Removal. The IMO is the London-based UN agency responsible for maritime safety and marine pollution prevention. The Wreck Removal Convention was adopted by IMO member governments at a diplomatic conference in Nairobi in May 2007 and entered into force in April 2015. The Convention will extend the powers of Coastal States to take action to remove wrecks posing environmental and navigational hazards in their Exclusive Economic Zone with the option to include their territorial waters which usually extend to the 3-mile limit.

It is not apparent whether the ratification of the Wreck Removal Convention will lead to an increase in wreck removal contracts. The ISU believes that there will be no change in the short term but for the longer term it may develop an increase in wreck removal contracts.