International Salvage Union’s (ISU) proposal to minimize environmental damage and that the proposal that only the vessel is solely responsible for the payment of claims, and the reapportion liability was rejected by the Committee Maritime International (CMI). The ISU maintains the position that the salvers should be paid a separate environmental award over and above what they are entitled to while salving a property, especially when there is a ship or a cargo that threatens damage to the environment`. The ISU’s proposal towards maintaining a viable salvage industry as well as improving the salvage response to benefit all stakeholders has taken a stance that such a compensating methodology would encourage salver organizations to invest money into research, manpower and equipment in creating a future that is beneficial to the environment. “In particular ISU considers the Convention should be modified to continue providing for the assessment of a financial Award for salvage services to maritime property, and, crucially, should also provide a financial Award for the degree of success a salver achieves in preventing or minimizing damage to the environment during salvage services.” The same was also expressed by the Marine Property Underwriters (MPU) who expressed intent to revise LOF, which sought to reapportion liability in favor of enhancing the award.
This was under Article 13 of the salvage convention which sought to compensate slavers for the services delivered to wards minimizing environmental damage. The MPU consider that this is beneficial to the liability insurers and therefore should be borne by them. However, International Chamber of Shipping (ICS) took a different position.
Summary of ICS position
It is in the interest of the ship owners and their insurers that they maintain an economically viable salvage industry. The salvers’ initial position on the concept of environmental salvage was that the industry was in financial crisis and that it needed more funds to merely even survive. ICS and IG were seized of this claim and asked ISU to submit detailed information pertaining to the claim of economic unviability. However, ISU was unable to submit any of the documentation that substantiated its stance of being in dire state. Salvers had another reason for introducing the concept that there has been an increased environmental responsibility, especially in case of a casualty, which takes a higher priority over salvage and property retrieval operations. This stems from the fact that there is an increased awareness about maintaining environmental safety and security.
Today, all the stakeholders including ordinary citizens express deep concern for the environment substantiated by appropriate action behind such a claim. The ISU’s claim that the environmental operations performed by them benefits the liability insurers. This benefit, which is pretty large according to the ISU in terms of reduction of the pollution liability claims. Despite all this, the slavers maintained that they do not get a salvage award which would benefit their profitability. In other words, the claim was that the salvers were being inadequately rewarded for taking responsivity towards the environment.
The CMI took up this issue pretty seriously and reviewed the concept at a generic level as well as specific proposals to amend the LOF. However, ICS was not persuaded enough to create a need for an environmental salvage award. The stance that ICS adopted was that the proposal was similar to the concept of liability salvage, which was adequately examined during the Salvage Convention negotiation in the year 1989. Finally, this proposal was struck down in favor of Article 13 and 14 of the Salvage convention 1989 and the subsequent, The Special Compensation P & I clause (SCOPIC).
SCOPIC is seen as an alternate to Article 14 towards compensating the salvers for their efforts for minimizing environmental damage. It is purposefully designed to be used along with LOF which is available to the slaver during the complete period of salvage operations. It also has tariffs which are profitable as well as generous for deploying personnel, equipment as well as tugs. These tariffs saw a significant upward revision as recently as in July 2007.
SCOPIC has a way to provide for salvers’ efforts and creating a reasonable and profitable reward mechanism for their effort in limiting the damage to the environment. ICS also did not agree with the need to reapportion the MPU liability under the Article 13 for creating an enhanced award specifically for services rendered in relation to environmental protection. The stance adopted by ICS was that all stakeholders in the maritime trade are equally responsible towards the environment in general and that all the stakeholders must participate in the event of any visible risk to the environment.
The general principle of salvage at sea has been based on “no cure – no pay methodology.” The compensation for salvage operations is specifically based on the property at risk and saved. This usually comprises of the ship, cargo and any possible freight that is at risk. Different judicial systems also at times, allow salvage of other items. However, the right and appropriate method of practice has always been that salvage is payable only on saving property.
The 1989 Salvage convention added concerns towards the environment in view of the fact that that nature of cargo has altered over a period of time and that more and more cargoes that are being carried by sea are capable of causing immense environmental damage. It also took the stance that slavers were no longer just expected to take appropriate action towards protecting and salvaging property but were also expected to take the required and necessary steps towards protecting the environment and that their actions in protecting the environment may not be compensated effectively at all.
It is pertinent to identify the fact that in LOF 80, the parties that are involved in a salvage contract had agreed to introduce certain newer methods of an enhanced award and as well as a safety net. These were agreed upon by all the stakeholders as well as by the insurers too. It was based on the LOF 80 that CMI International subcommittee relied on intensely, in creating a contractual compromise that came to be known as the Montreal compromise, which was agreed to during the CMI meeting in the year 1981. This was a carefully balanced package with intensely negotiated dimensions wherein the ship owners and the cargo interests had agreed to enhance their liabilities.
There is very little proof which details out this compromise, but for that all the parties were seen to have agreed that they would maintain a balance towards being responsible for prevention of pollution of the environment. Article 13 and 14 are seen to have enough methods outlined for rewarding the salvers’ effort towards prevention and minimization of environmental award and therefore there is no need for a special measure towards the same.
Bibliography
Bishop, A., 2007. Environmental Awards - Investing in spill prevention, s.l.: ISU.
Committe Maritime International (CMI), 2008. Proposal for Review of the Salvage Convention, s.l.: Committe Maritime International (CMI).
International Marine Consultancy (IMC), 2010. Salvage Contracts - SCOPIC Clause. [Online] Available at: http://www.imcbrokers.com/blog/overview/detail/salvage-contracts-scopic-clause[Accessed 12 March 2016].
Mandaraka-Sheppard, A., 2013. Modern Maritime Law (Volume 2): Managing Risks and Liabilities. Third ed. Oxon: Routledge.
Maritime Media Ltd., 2010. ISU Sceptical about Bunker Clause. [Online] Available at: http://www.worldbunkering.com/news/industry-news/1035-isu-sceptical-about-bunker-clause.html[Accessed 12 March 2016].
Tsavliris, A., 2016. Salvers Call for Environmental Salvage Awards. [Online] Available at: http://www.marine-salvage.com/media-information/articles/[Accessed 12 March 2016].
World Shipping, 2012. ISU calls again for environmental salvage. [Online] Available at: http://www.world-shipping.net/readnews.php?ide=126&PHPSESSID=4e56218bb4c6afa84f9e5a9bcc0a24ea[Accessed 12 March 2016].
