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Introduction

The Salvage Convention which was held in London in 1989, was adopted on the 28

th

of April 1989, and came into force seven years later, on the 14 thof July 1996 (IMO,

2013). The term salvage refers to any action taken by a salver when intervening in

any casualty situation to salve the ship and the property, and most particularly to save

human lives while last, but not least, to prevent any environmental damage by

pollution (MARINE-SALVAGE, 2013).

Until 1989, the existing legislation regarding salvage was the Assistance and Salvage

Convention 1910, held in Brussels, Belgium (CIL, 2009). A salver would only be

rewarded for their operations if the salvage was successful. If they did not manage to

save either the property or the cargo, then they would receive no reward, a model

known as no cure-no pay (IMO, 2013). A payment under this salvage contract can

only be made if the salvers party makes a successful claim (USLEGAL, 2013).

The most widely used no cure-no pay contract is the Lloyds Form of Salvage

Agreement, universally known as a Lloyds Open Form, or LOF. Originating from the

late 1800s, this form has been used more than any other in salvage cases (LLOYDS,

2013). Since its standardization in 1908, it has undergone eleven revisions, with the

most recent being in January 2011. Other contracts used are the Beijing Form, the

Japanese Form, and the Turkish Form, yet the LOF remains the most preferredcontract worldwide (MARINE-SALVAGE, 2013). Under the LOF, the salvers receive a

proportion of the value of the salvage in return for the salvage services

(SHIPSBUSINESS, 2010).

In the Salvage Convention 1989, two new incentives were given to the salvers.

Special Compensation is payable to the salvers when they have minimised, or

prevented damage to the environment, but the value of the salvaged property is

insufficient financial reward for the costs incurred while taking part in the salvage

operation. The second choice the salvers have is to choose the Special

Compensation P&I Club Clause (SCOPIC), under which the remuneration is based on

pre-agreed tariffs (COMITEMARITIME, 2013).

The International Salvage Union (ISU), considers that the present system, under the

Salvage Convention 1989, along with the commercial arrangements of Lloyds Open

Form and the SCOPIC, provide insufficient recognition for the salvors efforts to

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minimise or avoid damage to the environment. Therefore, the ISU has come up with a

proposal regarding the Salvage Convention 1989. The Union is of the opinion that the

Salvage Convention 1989 needs to be brought up to date. The ISU requires both an

award for salvage services to the maritime property, and an award for the degree of

success achieved by the salvors in minimising or even avoiding any damage to the

environment during their salvage operations (MARINE-SALVAGE, 2013).

This dissertations aim is to critically evaluate the International Salvage Unions

proposals for the amendment of the Salvage Convention 1989. This aim is going to be

achieved by discussing and analysing the two main objectives of this dissertation. The

first objective is to explain the ISUs proposals to amend the Salvage Convention

1989. With the appropriate methodology and data, this dissertation is going to define

the reasons why the Union is requesting this amendment and what the arguments are

which will be used to achieve the amendment. The second objective is to identify by

whom, any objections raised against the ISUs proposalsare made and to examine

them. The Comit Maritime International (CMI), for example, has been against the

Unions proposal for extra funding.

After identifying, explaining and examining the arguments and counter-arguments

regarding the Unions proposal, this dissertation will have the evidence and will be

able to provide an answer as to why the Salvage Convention 1989 should be

amended.

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Literature Review

The International Convention on Salvage 1989 starts with a chapter on generalprovisions that, after giving definitions, covers different aspects to which this

convention is applicable and provides a handful of areas where it is applicable. The

second chapter deals with performance of participating parties and this also gives

details of cooperation among the parties. The third chapter gives details of rights of

salvors that clarify what are the conditions for reward, the criteria for fixing a reward

and other such matters. The fourth chapter explains what claims and actions may be

involved in the course of action and how to deal with such cases. This is the longest

chapter of the whole convention as it explains a broad range of actions.

As far as the language writing is concerned, it is well knittedformatted, easy to

understand, clear and simple. Proper headings, concise wording and clear numbering

make the data sorting, searching and citing straightforward and time saving. It very

logically starts with definitions and ends with the maximum point of action. Thus it can

be asserted that the argument is developed logically and each decision is defended

with sound reasoning. The next step in the literature review is the comparison of

different works of the same type of li terature.

It is interesting to know that American Admiralty law gives a more material

reward to the salvor of material compared to the salvor of human beings. So, if a mansaves a vessel full of cattle he would be rewarded highly but if he saves all the human

beings present in the vessel and cannot save the vessel, he is not entitled to a single

penny. The life-saving activity here is left purely to morality and it is supposed that

every man would do everything possible to save another man. This was until the 1910

when the great maritime nations of the world agreed to put the legal compulsion up

against this obvious moral obligation. (Lawrence, 1954)

The traditional laws regarding salvage of ships and property in danger of being

lost at sea have served ship-owners and salvors well into the twentieth century

(Binney, 1990). The Brussels Convention for the Unification of Certain Rules to

Assistance and Salvage at Sea 1910 is the name of a treaty that has a logical basis of

the International Convention of Salvage 1989. It was concluded on 23 September

1910 in Brussels, hence why it is called Brussels Convention. It provided a basic

frame for salvage legislation.

Comment [D1]: Areas or examples? I haventseen it but examples reads better.

Comment [D2]: I am assuming it is in Englishlanguage is not quite right. You could say langua

used. However writing is the written

representation of the spoken word, so it covers boEnglish and the words used.

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However this convention was limited in uniformity regarding the salvage

operations. For example, its rules were limited and did not explain much about

compensation and liability of salvors. Moreover, it lacked details regarding

environmental protection and measures to minimize the damage to the environment.

Its basis can be traced to the general awareness regarding environmental protection

prevailing at that time. The revolution in the industrial world was still at its peak and

new innovations and inventions were being made in every field of human life. Human

thought had not developed to the extent that it might see the danger that the

environment was exposed to by from these ships or vessels. No doubt some

individual thoughts were prevailingprevailedat that time,but proper legislation was not

present anywhere till until some a number of incidents made it clear for to the world

that it was far more dangerous than a man can think ofin danger.

The first amendment to the 1910 convention was made in 1967. This

amendment did not change anything except the addition of warships and other military

vessels being included in the salvage list. This Convention on salvage was one step

further forward towards more environment friendly laws and regulations. The Amoco

Cadiz disaster became the major reason to update the old convention in the form of

the 1989 Convention on salvage. The Amoco Cadiz was a supertanker on its way to

Europe carrying crude oil from the Middle East, but was wrecked off the Brittany

coast in April 1978. The result was disastrous as 223000 tons of crude oil spilled out

polluting an area of almost 360 km. The marine population of bivalves, limpets, seabirds, periwinkles and limpets was severely affected and to a degree have never been

the same..

Creatures with a short lifespan have been replaced by the longer living

species. The effect is both long term and short term, no one is surely how long will it

take return to normal (G, G, & D, 1982). One of many changes that enhanced the

scope of the 1989 Convention on salvage from previous conventions include

environmental protection from as leakage of oil or other such material from ships.

Having witnessed at first hand the drastic effect on the environment, special

compensation was now to be awarded to encourage salvors to make attempts to

preserve and protect the environment from oil and fuel spills. The special

compensation was also offered to the salvor if he protects the ship or vessel from the

real danger or threat of loss or actual loss to the environment . On the basis of the

above discussion it can be asserted that with the passage of time, convention on

salvage has become more environment friendly and provides a synthesis between

environmental and human activity.

Comment [D3]: This really needs a date or atimeline. The industrial revolution was in the 19 th

Century, whereas the first concerns regarding glowarming werent really voiced until the 1970s

Comment [D4]: This is just the same as theprevious sentence

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If the three conventions of 1910, 1967, and 1989 are compared, it can be

observed that behind these three special factors encouraged concerned men to

amend each convention according to the requirements of the time. At the time of the

Brussels convention, it was a time of new technological changes and new discoveries,

it was necessary to take steps in order to secure the safety and sustainability of ships

and vessels. Thus a reward was offered to the salvor. Moreover, new technology was

also available to everyone what so ever intent that may have. So, this convention also

got safety from such kind of dangers. Actually at that time, it was a reward to the

salvor in response to the danger that he undertook to save the ship or vessel from

danger.

The amendment made to the 1967 Convention was also due to some social

factors. After the Second World War there was a huge increase in the sea power, in

the shape of vessels and warshipsmillions were spent building gigantic armed ships

and carriers, so governments also took steps to offer salvage for protection. Many

incidents proved that these ships and vessels were huge dangers to the environment

and there were some discrepancies in previous conventions. So in order to remove

the danger and make everything more save safe 1989 convention came into being.

Of the three Conventions discussed, the 1989 Convention was more

convincing compared to the previous ones as many provisions made it more

appropriate and beneficial for both man and the environment. There is a hugediscrepancy between the law of savage and UNESCO convention on the protection of

underwater heritage. This UN institution aims at protecting the heritage buried at the

bottom of the sea in the form of ancient and historical shipwrecks.

The issue arises from an article of the Convention which states that reward for

salvage operations would depend upon the nature and degree of the danger

(Organization, 2010). on the other hand, these shipwreck heritages cannot bear the

loss caused by any danger thus liquid gas and oil spills in the sea harm not only harm

living creatures but also death remaining of the sunken. The dispute is on the point

that law of salvage does not offer any kind of reward in the case of preventive

measures to protect the environment. However recent changes have been made in

the law. Now the salvor that first discovers the wreck not only gets the ownership of

the wreck but also the ownership of all the artifacts that are recovered from the vessel.

(Brooke, 2008).

Comment [D5]: What sort of reward and forsalving what? This needs expanding

Comment [D6]: I am really sorry, but this i snonsensical and impossible to understand.

Comment [D7]: I accept that this is basically asummary, but this is a bit weak without an exampor two.

Comment [D8]: I have deleted this as it makessense whatsoever and is not clear English.

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The traditional definition of salvage says that it is a benefit that is conferred on

salvor for saving or for helping in the process of saving in a recognized condition of

danger from which one cannot extract oneself unaided. Forrest recognizes that there

are four criteria that are necessary to be satisfied before the salvage law can be

applied. The property and carrier should be on navigable waters, the rescue efforts to

save property should be voluntarily rendered, success might be total or partial and

conduct is inthe interest of saving the owner's property. (Craig, 2002) Thus the

element of danger is essential in the salvage service. Under this condition many

questions arise when it is compared with the convention of UCH.

The question is how the law of salvage is applicable to the recovery of UCH

under any circumstance? There are two opinions in answer to this question. Those

who want to the application of salvage law preserved for UCH recovery give broader

definition. They include both physical threats to artifacts and economic actual loss.

Opposed to this, others give a narrower approach. In both cases there is not a single

detailed interpretation from the court in either way. The court has left it to the legal

system of the adjacent country, for example in England, such an abandoned ship

becomes the property of the Crown, while in USA it becomes the property of the

person who finds it and claims it as his possession. And these days recovery of

artifacts located on the floor of the sea is increasingly feasible due to technological

advances in underwater survey and recovery techniques (U.S. Concerns Regarding

UNESCO Convention on Underwater Heritage, 2002)

No doubt this convention was designed to facilitate and remove those

drawbacks that were present in the convention for the unification of Certain Rules

Relating to Assistance and Salvage at Sea 1910. However with the changes in

technology, new methodologies and the incredible sizes of vessels have made the

process of salvation very difficult and very expensive. Moreover, there is also a need

for larger vessel that might salve the one in danger. (Gaskell, 1989)

Technology has moved on apace and use of internet and other hi-tech

equipment has made some articles of the 1989 Convention on salvage ineffective in

today's world. A dire need is felt these days for modification, revision and upgrading of

this convention. A major issue in this regard is that the world will have to live many

years without any certainty and this period will surely mark as a period of

unpredictability as opposed to this period of prediction and relaxation as was the case

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in 1989 where until the last hour there was read danger that agreement would not be

reached in time. (Michael, 1990)

As time moves on, everything develops and it becomes necessary to update

the current paradigms according to the challenges met. This also applies to the

Conventions on salvation. There have been many articles that promote this. There

may be some elements of disagreement among interested parties. It is not quite a war

of attrition but at its roots lies the desire for everyone to get a bigger share of the pie.

Moreover there are two types of salvors. There are those who are provide

professional salvage services to shipping, and they are earning good money in the

form of salvage rewards both on the material front and environmental front. The

second group comprises of those treasure hunters that are looking for treasures in the

seabed of the oceans. According to UN report there are almost three million

shipwrecks on the seabed. Nobody knows how much treasure these wrecked vessels

and ships hold. These treasure hunters do not pay attention to the preservation of

underwater cultural heritage. These transgressions, along with many other challenges

threaten the efficacy of the 1989 Convention on salvage.

Remuneration is offered after assessing the level of success of the event, the effort

and involvement of the salvors. This includes the danger the salved vessel was in, the

threat to crew, passengers and cargo, expenses incurred and losses suffered, timeexpended, risks of liability and the value of the property salved. All these will be taken

in to consideration by the court for the determination of the remuneration to the

salvors. In cases of fraud, rendering the salvage or assistance necessary, or have

been guilty of fraud, the salvors may be deprived by the court to remuneration, or may

be awarded reduced remuneration.

The Lloyd's Open Forum establishes the remuneration given to the salvors for

their services. It was instituted in 1980 as a form of independent arbitration to settle

any disputes over awards given to or requested by salvors.. Thus Lloydsbecame a

standard and was regarded as impartial whenever there is any kind of dispute

between opposing parties regarding the remuneration for services provided. It has

received high praise regarding its final modification relating to oil pollution at sea and

in open waters. Lloydshas offered a safety net provision in this regard, which means

the salvors, while providing their services, are required to use their best endeavours to

prevent oil spills from all types of vessels and not just laden or partially laden oil

Comment [D9]: This seems total nonsense anneeds rewriting

Comment [D10]: Leave this out or reword it tmake some sense in proper English.

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tankers. A It should be noted however that this provision does not bind the salvors to

take any specific kind of measure to protect the environment from the danger from oil

or fuel that has already escaped or is escaping Here salvors can save materials

onboard the ship or vessel. However, the salvors efforts, regardless the success, or

any environmental damage caused, are still compensated. (Donald & O'May, 1983).

Oil, including fuel oil is the only cargo to which the safety net applies, and as

a result, it does not relate to any other hazardous and noxious cargoes, many of

which are carried in large quantities, such as liquefied gas and chemicals. Under this

scheme, the ship-owner should reimburse the salvors for their expenses, plus a

supplement up to an additional 15 %, which would depend upon the value of the

salvaged goods. This newly introduced scheme reflected an ever-increasing

worldwide awareness of the effects of oil pollution on the environment.

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Methodology

After specifying the aim and the objectives of the dissertation, the author is going toanalyse and justify the methods of approach, data collection and research which will

be used throughout this paper.

The two methods of approach are deductive and inductive. The first works from more

general to more specific reasoning, also known as a top-down approach.At the top

of this scheme, there is a theory which the author uses as a starting point. The next

step is to narrow down this theory and extract one or more hypotheses, which then

need to be tested. The outcomes of these hypotheses are the observations. Multiple

verifications, successful or not, are either going to lead the author to a confirmation of

their original theory, or to an unsuccessful result.

The second method, also known as bottom up, is called inductive, and its

methodology is in reverse to the deductive method. Starting from specific

observations, the author, through a procedure, arrives at generalisations and theories.

After having achieved these specific observations, the author tries to detect patterns

and regularities through which a number of tentative hypotheses can be formulated.

The exploration of such hypotheses will provide enough evidence in order for a

theory, or number of theories, to be developed (SOCIALRESEARCHMETHODS,

2006).

Judging by the brief analysis of both the deductive and inductive methods of

approach, the best suited method of approach for this dissertation is going to be the

inductive method. Arguments for and against the amendment of the Salvage

Convention 1989, are examined and analysed in order for some patterns and

regularities to be detected. The next step for the author is to formulate some tentative

hypotheses, coming from the critical evaluation of the ISUs proposals, and lastly, this

method will end by developing some general conclusions as to why the Salvage

Convention 1989 needs to be amended.

This dissertation is largely based upon secondary research and has been

supplemented with an interview. Therefore, its outcomes and all information provided

can be regarded as secure, up-to-date, and unlikely to contain any kind of prejudice

by the author.

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The secondary research which was carried out was mostly based on carefully

researched and checked online documents including articles, websites content and

online fora, as the information provided there is updated, documented and easily

controlled, so that the qualitative character of the information remains high. Moreover

there was extensive reading and information collection from books and paper journals

as well.

The primary research contains an interview with the current president of the

International Salvage Union, Mr. Andreas Tsavliris. His position, and the information

provided by him regarding the main subject of this dissertation were of great

importance. Having to tackle one of the most critical elements of the ISU over the past

decades, the opinion of someone who is not only involved in the organisation, but is

also the president of it, was considered most appropriate and important. The interview

scheme was preferred instead of a questionnaire as direct communication is better

than a questionnaire the unrestricted restricted results are more accurate. Due to the

heavy work program of Mr. Tsavliris, the interview was conducted through a number

of emails, while Mr. Tsavliris was away from work. The interviews style was semi-

structured. The author asked some pre-arranged questions, but the answers given

raised some new questions, which were then asked subsequently.

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Results

THE SALVAGE CONVENTION 1989Almost eighty years after the Convention on the law of salvage held in Brussels in

1910, which introduced the no cure- no pay scheme, the need for a change in the

no cure-no pay scheme was more than imperative. The 1910 Convention was

regarded as being outdated and the environmental concerns and awareness have

significantly increased since then. On April 28, 1989, the Salvage Convention was

concluded in London, but it was not until after July, 1996, that the conventions

provisions, which are analysed below, came into force after being ratified by 15

States, as mentioned in Article 29 (JUS, 2013). The 1989 Convention sought to

remedy the no cure - no pay deficiency by making provisions for an enhanced

salvage award taking into consideration both the skill and effort of the salvors

operating in preventing or minimising damage to the environment (IMO, 2013).

After describing the general provisions in Article 1 as to what is considered to be a

salvage operation (Art.1 a salvage operation means any act or activity undertaken to

assist a vessel or any other property in danger in navigable waters or in any other

waters whatsoever (JUS, 2013)) and also determining what vessel means, the

Convention makes its first reference to the environment in article 1 (d). Damage to

the environment means substantial physical damage to human health or to marine life

or resources in coastal or inland waters or areas adjacent thereto, caused bypollution, contamination, fire, explosion, or similar major incidents (JUS, 2013). At this

point there is the first ever reference in a salvage convention to environmental

damage. Further references are made in articles 6(3), 8 (1)(b), 8(2)(b), 11, 13(b),

14(2), 14(5) and 16.

In article 8(1)(b), it is specified that included within the duties of the salvor is to

exercise due care to prevent or minimise damage to the environment, when carrying

out a salvage operation, where in subparagraph (2)(b) of the same article, the same

duties are held by the master and the owner of the ship. Article 11 refers to the co-

operation that needs to be achieved between salvors and public authorities whenever

a vessel is in distress for the purpose of saving human life, as well as protecting the

environment in general. Moving on to the reward fixation, article 13(b) clarifies that the

reward should be such - to encourage salvage operations, taking into account, among

other things, the skill and efforts of the salvors in preventing or minimising damage to

the environment (CMI, 2010).

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Casualties such as the Amoco Cadiz (1978), Atlantic Empress (1979) and the

Christos Bitas (1978), that involved huge oil spills, resulted in governments refusing a

place of refuge for salvage work to be completed. As a result, salvors were forced to

end up towing the vessels into the open sea and scuttling them. The no cure-no pay

scheme prevented them from covering their running costs and, moreover, it

discouraged them from assisting ships in dire situations (MARINE-SALVAGE, 2013).

Those results led to the most controversial and most discussed article of the

Convention, article 14. In paragraph two the term special compensation appears for

the first time in a salvage convention script. When salvors operate with the intention of

prevention or minimising environmental damage, special compensation becomes

payable to them by the stricken vessels owner, which may produce an additional

payment of up to 30 per cent of the costs involved. However, the tribunal, if it deems it

fair, may increase special compensation further, but in no case should it be more than

100 per cent of the expenses incurred by the salvor. Paragraph 5 determines that no

special compensation, or part of it, will be awarded, if the salvor has been negligent

and as a result has failed to minimise or prevent pollution to the environment (JUS,

2013).

In article 16, the salvors, if they are involved in saving human lives, are entitled to a

fair share of the payment awarded to salvors for salving property, the vessel,minimising or preventing damage to the environment.

These new facts changed the salvage industry and its provisions, because under

these changes, salvors would at least recover part of their expenses whenever there

was a threat of damage to the environment.

The 1989 Salvage Convention, in its final clauses of chapter five, clarified that it

should come into force only after the date 15 States have given their consent to be

bound by it, as happened on July 14 1996. Finally, in article 32, any revision or

amendment may be convened by the Organisation through a conference by request

of at least eight statesparties, or one fourth of all the states parties, whichever is the

higher figure.

THE NAGASAKI SPIRIT CASE

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On the 19th of September, 1992, the tanker NAGASAKI SPIRIT, part laden with

40,154 tons of crude oil, collided with the container ship OCEAN BLESSING in the

northern part of the Malacca Straits. It was a classic T-Bone collision and, as a result,

a massive fire ensued and approximately 12,000 tons of crude oil spilled into the

Malaysian waters (GILIGAN, 1998).

The salvage company involved in the case agreed to intervene under the LOF 90

contract and managed to tow the vessel away from the Malaysian waters after

concerns from the authorities about environmental damage. Ten days later the ship

was anchored off Indonesia. The two sides (the salvage company and the ship and

cargo owners/insurers) did not manage to come to a deal and therefore they appealed

to the High Court in 1997 (DIGILIB, 2009). The House of Lords held that under the

1989 Salvage Conventions article 14.3, a fair rate for equipment, and personnel

reasonably used in a salvage operation, meant a fair rate of expenditure and did not

include any element of profit (CMI, 2010).

Lord Mustill in his judgment said: ...the promoters of the Convention did not choose,

as they might have done, to create an entirely new and distinct category of

environmental salvage, which would finance the owners of vessels and gear to keep

them in readiness simply for the purposes of preventing damage to the environment.

Paragraphs 1, 2 and 3 of article 14 all make it clear that the right to special

compensation depends on the performance of "salvage operations" which ... aredefined by article 1(a) as operations to assist a vessel in distress. Thus although

article 14 is undoubtedly concerned to encourage professional salvors to keep vessels

readily available, this is still for the purposes of a salvage, for which the primary

incentive remains a traditional salvage award (IPSOFACTOJ, nd).

The problems arising from Article 14 of the 1989 Salvage Convention led to

dissatisfaction and uncertainty. Among other problems, it was found that under Article

14.2, claims for uplift over actual costs incurred necessitated proof not only that

environmental damage would have resulted but for the salvors intervention, but also

the extent of the damage had the operation been unsuccessful. Naval architects, drift

experts and a variety of other experts were needed. Additionally the accounting

exercise referred to in the Nagasaki Spirit case by the House of Lords was found to

be both expensive and time-consuming (CMI, 2010).

SCOPIC

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As a result of all these deficiencies mentioned above, a new clause was implemented

in order to replace, but keep the same effect as Article 14 of the 1989 Salvage

Convention (CMI, 2010). The SCOPIC (Special Compensation P&I Club) clause

endorsed the concept that contractors could receive Special Compensation (expenses

plus a fair rate for any tugs and equipment used) only in circumstances where the

salved fund was not sufficient to allow them to recover adequate award provided by

Article 13, but its innovation was that it introduced a tariff to calculate the contractors

Special Compensation along with an uplift fixed at 25 per cent (Lloyds, 2013). Article

13 awards will be discounted by 25 per cent of the amount by which any such award

exceeds the SCOPIC remuneration.

The SCOPIC clause was warmly embraced by the maritime community, but through

its use in a number of cases, some matters emerged that needed clarification to

confirm the original intent behind SCOPIC, and a number of gaps appeared which

needed to be filled in the wording of the clause, like Tariff Rates. The drafting sub-

committee of SCOPIC, to this end, produced the amended SCOPIC 2000, which

came into effect in September 2000 (IMCBROKERS, 2013).

The SCOPIC clause is an optional clause to LOF and is only included as part of that

contract if specifically agreed in writing.

Shipowners liability for special compensation is insured in the P&I market and,subsequently, such developments may not be thought by property underwriters to

have any immediate relevance. Thus, there are aspects of SCOPIC which will

concern all property underwriters if the ship owners and the contractors involved

agree to add a SCOPIC clause to their LOF contract (Lloyds, 2013).

The ISU has expressed its oppositions to the current use of the SCOPIC clause,

stressing that it is nothing more than a safety net and is not a method for

remuneration. The union has also characterised it to be more an LOF contract

solution than an international one and has claimed that problems, such as who would

be the negotiator for the rates, how they would be determined, and whether people

would seek to apply it as a matter of law rather than contract. As a result it gives no

incentive to the salvors to intervene and the problems of Article 14 remain.

On the other hand, the International Chamber of Shipping (ICS) suggests that the

SCOPIC clause is more than just a safety net (as this term appears in the LOF 80 for

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any changes made, to provide compensation for the salvors because of the no cure-

no pay principle) and it does positively encourage salvors to intervene where

otherwise they might not do so, and therefore it is an improvement over Article 14.

Moreover, the ICS points out that as LOF contracts are used around the world and

they have a global recognition, the same is likely to happen with the SCOPIC clause.

The Chamber believes that salvors are generously awarded under SCOPIC, whilst the

ISU representatives believe that was the original intention, but inflation and currency

changes over the past years have diminished the generosity, and as a result, salvors

are discouraged from intervening under these circumstances (CMI, 2010).

BUREAU VERITAS REPORT

The Bureau Veritas investigation in the early 1990s is a strong ally of the ISU in terms

of proof that the industry, along with its resources, are in decline. The indicators of

such results are a reduction in casualty rates, falling levels of remuneration, and

competition created by the availability of offshore support vessels and other ancillary

craft, leading to the withdrawal of professional salvors from the market, the reduction

of dedicated salvage craft and lastly, the closure of additional salvage stations

(COMITEMARITIME, 2010).

What arose through this report and what is considered to be the cause of all those

problems, is that the international salvage industry is in the hands of comparatively

few companies. The union points out that these companies have shareholdersseeking profit. As a result, if the industry is generously rewarded, then they would

keep on sticking with it and they will accept the risk, but if the industry is not

sufficiently rewarded, then they are most likely to move their assets to a less risk-

orientated business. Taking into consideration the very few international players, such

an act could be a problem for both the shipping industry and the environment.

The ICS, on the other hand, does not accept these claims to be real and points out

that new entrants have joined the salvage industry. Additionally, reduction in the

number of salvage companies can be a reflection of mergers and the greater range of

operations being performed.

LOF 2011LSSA

After lengthy and constructive debate at the Lloyds Salvage Groups meetings in

2010 and 2011, a number of amendments to the existing LOF have been agreed. The

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new LOF is known as LOF 2011.Two new clauses have been added to the existing

LOF.

The first clause refers to the wider accessibility of the Arb itrators Award and the

Appeal Award. Therefore such access will be via subscription from the Lloyds

website. The second change has to do with the notification of LOFs to Lloyds. The

Contractor shall, within two weeks, notify the Lloyds Council of theirengagement and

forward the original agreement to the Council as soon as possible (LONDONPANDI,

2013).

The Lloyds Standard Salvage and Arbitration (LSSA) Clauses went through some

amendments as well. Under the new clause 13 for container vessels, it is provided

that any correspondence or notices in respected of salved property may be sent to the

party or parties who have provided salvage insurance cover in respect of that

property. Clause 14 provides that, subject to the express approval of the Arbitrator,

where an agreement is reached between the contractors and the owners of salvaged

cargo comprising at least 75% by value of salved cargo represented in accordance

with clause 7 of the Rules, the same agreement shall be binding on the owners of all

salvaged cargo who were not represented at the time of the said approval.

Finally, the new clause 15 provides that, subject to the express approval of the

Arbitrator, any salvaged cargo with a value below an agreed figure may be omittedfrom the salvage fund and excused from liability for salvage where the cost of

including such cargo in the process is likely to be disproportionate to its liability for

salvage (LLOYDS, 2013).

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Discussion

Seeing what has taken place in the salvage industry since its organization andregulation in the late 19th century, and what changes have occurred, it is easy to

realise that there are two different opinions and strategies coming from two different

sectors of the industry. On the one side is the ISU, which looks forward to the

amendment of the 1989 Salvage Convention in order to be able to increase revenue

for salvors in the Union and also be able to remain competitive and up-to-date in

terms of technology and equipment. On the opposite side, there are the shipowners

and the insurers, who are fighting to keep their costs as low as possible in order to

maximise profit.

As a result, both sides have put forward arguments in order to support their proposal

and to try to convince the opposing side to adopt and accept their proposals. At this

point in the dissertation, the author will now refer to the two objectives mentioned in

the introduction and analyse them. First, regarding the ISUs proposals, there will be

an extensive explanation of the Unions proposals in favour of the amendment of the

1989 Salvage Convention. Secondly, the author is going to bring to light the

objections raised by the parties who are against this amendment (CMI ICS). In the

last part of this section, there will be an analysis, in terms of critical evaluation, of the

Unions proposals, which will lead to the final conclusion of this dissertation- why the

1989 SC should be amended.

Apart from the award given for salving maritime property, the ISU suggests a second

award that should be given to those who are participating in a salvage operation. This

award will be given based on the degree of success achieved by a salvor in

minimising or avoiding any damage to the environment during the salvage operation.

This proposal is formulated by the ISU because the Union believes that the current

award system for salvors based on the 1989 Salvage Convention, the commercial

arrangements under Lloyds Open Form 2011, and where applicable, the SCOPIC

2011, do not properly recognise the salvors efforts in carrying out their obligations

under the 1989 Salvage Convention in minimising or avoiding environmental damage

(MARINE-SALVAGE, 2013).

As Archie Bishop, the Legal Adviser to the International Salvage Union (HFW. 2013)

writes in one of his papers, the ISU raised the issue for the update of the 1989

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Salvage Convention with the Lloyds Form Salvage Group which is responsible for

keeping the LOF contract up-to-date and in tune with the needs of the maritime

industry. A subcommittee was set up by the Salvage Group whose members were

representatives from the London Property Underwriters, the International Group of

P&I Clubs, the International Chamber of Shipping, and the International Salvage

Union. The issue for change of the present conditions regarding the salvage award

under the 1989 Salvage Convention was discussed at a number of meetings between

2007 and 2008, but unfortunately the unanimity required in order to implement any

changes could not be achieved. The idea that change was necessary was supported

by the ISU and the London Property Underwriters, whilst the shipowners and the ICS

were implacably against any change, remaining wholly content with the current

system (LAW.TULANE, 2013).

After their first failure, the Union then approached the Comit Maritime International,

which had previously drafted both the 1910 and the 1989 Salvage Conventions, and

asked them for a review of the 1989 Convention to be added to their work schedule.

After accepting this request, the CMIs Council set up an International Working Group

(IWG) to examine the issue. The IWG then issued a questionnaire to gather pertinent

information from some 56 national maritime law associations. This resulted in the

possible review of the 1989 Convention being discussed at two venues - an

exploratory meeting held in London in May 2010, and a CMI Colloquium held in

Buenos Aires in October 2010 at which all sides of the industry presented theirpositions and all issues were debated. Later on, a second questionnaire was sent to

the 56 maritime law associations and its report was prepared for the Beijing

Conference which was held in October 2012 (COMITEMARITIME, 2013).

At the CMI Colloquium in Buenos Aires, the ISU president, Todd Busch, when giving

explanations as to why the salvage industry felt it was not being properly rewarded for

preventing environmental damage, said: "Let me say straight away we recognise

salvors are in many cases rewarded for protecting the environment by virtue of the

Salvage Conventions Article 13.1 (b). However, all too often the tribunal is unable to

give full effect to this provision because of the low value of the salved property. Cases

that give rise to a material threat to the environment are often of low value compared

to the cost and effort involved and it is in these cases that we feel inadequately

rewarded. In such cases Article 14 (subsequently replaced by SCOPIC - which has its

own problems) ameliorated the problem by providing compensation so salvors were

not 'out of pocket', but it has always been a 'safety net' rather than a method of

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remuneration. SCOPIC (which only applies to Lloyds Open Form cases) is the same,

a safety net. Statistically, SCOPIC is applicable in 25% of all LOF cases so, in 25% of

cases, salvors are receiving just the bare minimum. In other cases the effect will

diminish as values rise, until the value is high enough to fairly reward the salvor for

what he has actually done. The break-even point is uncertain but it could be as much

as 50% of all cases. It is the injustice of being inadequately paid for the benefit

conferred that we seek to correct" (SOYER and TETTENBORN, 2012).

Later in his speech, regarding Special Compensation, he added: "We recognize the

introduction of the SCOPIC Clause substantially improved the mechanism of

assessing special compensation, as compared to the 1989 Salvage Conventions

Article 14, in LOF cases. But I emphasize, SCOPIC, like Article 14 is a method of

compensation when an award to cover cost cannot be made. It is not a method of

remuneration which is what we seek. Salvors would not be in the salvage business if

their remuneration was restricted to an Article 14 or SCOPIC award" (SOYER and

TETTENBORN, 2012).

After identifying problems in article 14, referring to SCOPIC as a safety net and finally

saying that current levels of remuneration are insufficient for salvors, the ISU

president went on to give three reasons as to why the present system had to change.

"Firstly, much has changed since the Salvage Convention was first drafted in 1981.Environmental issues now dominate every salvage case and what may have been a

satisfactory encouragement then is no longer so today. Further, there is more risk to

the salvor from tougher regimes which can criminalize the actions of well-meaning

salvors.

Secondly, while salvors always work to protect the environment whilst carrying out

salvage operations, they are not fully rewarded for the benefit they confer. They are

rewarded for saving the ship and cargo, but not the environment.

Thirdly, salvors and marine property insurers believe it is not fair that the traditional

salvage reward that currently, but inadequately, reflects the salvors efforts in

protecting the environment is wholly paid by the ship and cargo owners and their

insurers without any contribution from the liability insurers, who cover the shipowners

exposure to claims for pollution and environmental damage" (SOYER and

TETTENBORN, 2012).

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The Unions president, Todd Busch used the date problem in order to support his

position. Thirty years since the Conventions drafting in 1981 is quite some time,

especially when taking into consideration that the environmental issues tend to

dominate all salvage operations. Therefore, the environmental perspective has to be

taken into more serious consideration. In his second argument, Mr. Busch, placed

emphasis on the awards given. He claimed that the awards were ship- and cargo-

orientated and clearly not environmentally-orientated. Again, the environmental factor

had not been taken into consideration. Lastly, the liability insurers should be included

in the salvage reward, along with the current players (shipowners, cargo owners and

insurers).

The Unions next step was to clearly identify and put forward the existing problems,

along with the proposed amendments that needed to be made. The ISU focused on

three articles, which should be amended and which proposed the following changes.

ARTICLE 1(d)

In the whole convention, the provisions which have an environmental concern apply

when there is damage to the environment, or a threat of it, as defined in article 14.1.

The term damage to the environment is defined as follows: d) "Damage to the

environment means substantial physical damage to human health or to marine life or

resources in coastal or inland waters or areas adjacent thereto, caused by pollution,contamination, fire, explosion or similar major incidents(COMITEMARITIME 2013).

The ISUs thesis is that there is no limitation to the environment of coastal waters and

therefore there should be no restriction. What should be removed is the words in

coastal or inland waters or areas adjacent thereto. According to the present wording,

no geographical limit is needed. The word substantial also needs to be taken into

consideration, as something that may be substantial to one area may not be in

another. For example, an oil spill of one tonne in the River Plate would undoubtedly

be substantial. The same size oil spill in the middle of the Atlantic Ocean is not likely

to be considered substantial. The Unions feeling is that any informed tribunal would

be capable of making up its mind in the light of all the circumstances and, in the

interest of simplicity, sees no purpose in imposing any geographical limit. That said, it

could accept a limit of the Economic Zone which is used in later conventions such as

the 1992 Protocol, the HNS Convention and the Bunker Convention, which all refer to

the economic zone (COMITEMARITIME, 2013).

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ARTICLE 13.

Very little change is required to the current Article 13, according to the ISU proposal.

The main change has to do with the removal of 13.1 (b). This article will be

incorporated later on into the new article 14. Below, there is the current article 13, with

the proposed amendments highlighted in bold print.

13.1. The reward shall be fixed with a view to encouraging salvage operations, taking

into account the following criteria, without regard to the order in which they are

presented below:

(a) the salved value of the vessel and other property

(b) the skill and efforts of the salvors in preventing or minimising damage to the

environment, is changing to the new article (b)

(b) the measure of success obtained by the salvor

(c) the nature and degree of the danger;

(d) the skill and efforts of the salvors in salving the vessel, other property and life;

(e) the time used and expenses and losses incurred by the salvors;

(f) the risk of liability and other risks run by the salvors or their equipment;

(g) the promptness of the services rendered;

(h) the availability and use of vessels or other equipment intended for salvage

operations;

(i) the state of readiness and efficiency of the salvor's equipment and the valuethereof.

(j) Any award under the revised Article 14.

13.2. Payment of a reward fixed according to paragraph 1 shall be made by all of the

vessel and other property interests in proportion to their respective salved values.

However, a State Party may in its national law provide that the payment of a reward

has to be made by one of these interests, subject to the right of recourse of this

interest against other interests for their respective shares. Nothing in this article shall

prevent any right of defence.

13.3. The rewards, exclusive of interest and recoverable legal costs that may be

payable theron, shall not exceed the salved value of the vessel and other property.

13.4. For the avoidance of doubt, no account shall be taken under this article of

the skill and effort of the salvor in preventing or minimising damage to the

environment (LAW.TULANE, 2013).

The ISU in this new proposed article wants to clarify that the reward will be given to

the salvors, relating to the measure of success in their operation. The newly

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introduced (j) paragraph, adds any other awards under the new Article 14. Salvors are

looking for economical motivations to intervene in salvage operations and, as a result,

greater profit. Therefore, the introduction of paragraph 13.4, clarifies emphatically that

the current Article 13.1. (b), is something that should be excluded from the

conversation. Under article 13, no account of the salvors effort in preventing or

minimising environmental damage shall be taken into consideration.

REVISED ARTICLE 14

Article 14, as has been previously clarified on this paper through the LOF, the

Nagasaki Spirit case, and SCOPIC, tends to be the most controversial article of the

whole 1989 Salvage Convention. Following numerous discussions the industry

reached the conclusion that Article 14s outcome was uncertain, expensive to

implement and cumbersome to operate. It was replaced by SCOPIC in LOF cases in

1999, but is still the law in 60 countries. The Un ions proposal is to remove it

completely, and to replace it with the following:

1. If the salvor has carried out salvage operations in respect of a vessel which

by itself or its bunkers or its cargo threatened damage to the environment he

shall in addition to the reward to which he may be entitled under article 13, be

entitled to an environmental award. The environmental award shall be fixed with

a view to encouraging the prevention and minimisation of damage to the

environment whilst carrying out salvage operations, taking into account thefollowing criteria without regard to the order in which they are presented below.

(a) any reward made under the revised Article 13

(b) the criteria set out in the revised Article 13.1 (b) (c) (d) (e) (f) (g) (h) and (i)

(c) the extent to which the salvor has prevented or minimised damage to the

environment and the resultant benefit conferred (COMITEMARITME, 2010).

Under this proposal made by the ISU, a tribunal could make an environmental award

every time there was a threat to the environment. With the new criteria set in the

proposed Article 14, the salvor does not have to actually prevent damage to the

environment. The new environmental award is no longer limited to expenses as in the

present Article 14.1, nor does it depend on proof that the damage to the environment

has been prevented, as required by the current Article 14.2. The amount of the award

is left entirely to the tribunals discretion, after taking into consideration such factors

when reaching its assessment.

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As Archie Bishop points out: The suggested criteria emulate Article 13 save for (c)

which gives the tribunal the power to take into account the degree of success in

preventing damage and the benefit thereby conferred. So, if there was a threat of

pollution in waters that would impose a liability on the owner, the award would be

more than if it had been in waters which did not impose such a liability, for the benefit

conferred would be that much greater (SOYER and TETTENBORN, 20012).

The Union accepted that there should be some form of cap on any environmental

award and therefore proposed that:

14.2 An environmental award shall not exceed the amount of the shipowners

limitation fund under the CLC 1992, the HNS Convention 1996, the Bunker

Convnetion 2001, or the 1996 LLMC Protocol or their respective successors,

whichever may be appropriate to the circumstances of their case

(LAW.TULANE, 2013).

Due to the fact that the Conventions mentioned above have no relevance to an

environmental award, except in establishing the amount of the appropriate cap, some

were unhappy with this development. Therefore an alternative proposal has been

made.

14.2. An environmental award shall not exceed(a) In relation to a ship not exceeding 5000 tons gross x special drawing

rights

(b) In relation to a ship exceeding 5000 tons y special drawing rights per

gross ton subject to a maximum of z special drawing rights.

14.3. For the avoidance of doubt, an environmental award shall be paid in

addition to any liability the ship owner may have for damage caused to other

parties.

This provision is very beneficial for the salvors, as they do not want to be put in a

position of competing with third party claimants, something which will lead to

inevitable delays. In most such cases, it is not likely to be relevant to the owner for if a

limitation fund is applicable. In addition, the salvor is not likely to have been

successful in preventing damage and therefore be entitled to an environmental-based

award.

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14.4 Any environmental award shall be paid by the shipowners.

As with the present Article 14, the Unions proposal makes the shipowner liable for

any environmental award rather than the cargo owner, as they are the ones who are

liable for any pollution under modern conventions and laws. The proposed

amendment to Article 14 concludes with two Articles that are in use under the current

convention.

14.5 If the salvor has been negligent and has thereby failed to prevent or minimise

damage to the environment, he may be deprived of the whole or part of any

environmental award under this article.

14.6. Nothing in this article shall affect any right of recourse on the part of the owner

of the vessel (LAW.TULANE, 2013).

The proposed amendments to Article 14 result in a tribunal being the only responsible

body able to assess an environmental award. According to Archie Bishop, experience

over more than 100 years has shown that a properly informed tribunal has the

capability to weigh up all factors set out in Article 13 and provide a just and fair

decision regarding the environmental award, which is high likely to satisfy the industry.

Lloyds Open Form deals with approximately 100 cases each year, many of substantial

proportions. For almost a hundred years, courts worldwide have been dealing with

such cases, therefore this system is proven to be tried and tested. Mr. Bishop

concludes that under these circumstances there is no reason why a tribunal cannotdo the same when assessing an environmental award (SOYER and TETTENBORN).

The difference now is that instead of examining the loss of cargo or the possible

damage, the tribunal will now have to examine and establish the danger of damage to

the environment. P&I Clubs have expressed their doubts by saying that such a system

includes high percentages of uncertainty and is very complicated

(COMITEMARITIME, 2013). According to Archie Bishop though, the proposed system

is no more complicated or uncertain than the current system which the P&I Clubs are

happy with. The present assessment of a salvage award under Article 13 is very

similar to what is proposed by the ISU for assessment of environmental salvage and

has to be done in almost all cases, even when SCOPIC is involved.

London Arbitrators are said to have already taken into account the potential liability

from which cargo and ship are saved. Such potential liability does not have to be

proven to the last dollar. It is sufficient to know of the risk and to weigh in the balance

the degree of that risk. It will be the same for an environmental award. A threat will be

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sufficient for an award to be made but clearly the degree of that threat and the likely

consequences will have a bearing on the amount that is awarded. That is for the

tribunal to decide. (SOYER and TETTENBORN, 2012).

The ISUs president said in Buenos Aires "salvors do not expect to be paid unless

there is a benefit conferred and they fully expect an environmental award to be

commensurate with that benefit. They do not expect anything unless it has been

earned and are happy for an appropriate tribunal to make the judgment of what is fair

and reasonable" (LAW.TULANE, 2013).

The Unions proposals for amendments to Articles 13 and 14 are the only proposals

put forward to date, but alternative solutions are likely to be presented in the future.

The ISU is resilient to an extent, due to the fact that they are looking forward to

changing the existing standards in the salvage industry and achieving their goals, but

in no sense are they willing to abandon their basic principles and proposals.

OBJECTIONS RAISED

As mentioned above, there were two sides to the amendment issue. Those for the

amendment, the ISU and the London Property Underwriters, and those against it, the

P&I Clubs and the ICS who both represent the shipowners interests. The chairman of

the International Working Groups, Stuart Hetherington, in December 2011, at the U.S.

Maritime Law Association meeting in Hawaii, summarised in an excellent way theCMIs current position on the subject.

In his paper, Hetherington explained that of the twenty-four responses to the

questionnaires which were previously mentioned on this paper and which had been

completed by the National Maritime Law Associations (NMLAs) regarding the

environment issue, the vast majority wanted an amendment to the definition of

damage to the environment, nevertheless not the exact and whole proposal was

made by the ISU. There seems to be support for extending the geographical scope of

damage to the environment to at least the exclusive economic zone. The NMLAs

seem fairly relaxed as to whether the word substantial should be changed. The ISU

has recently suggested substantial be replaced by the word significant, which might

be more appealing to the NMLAs.

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While there is a more even split, the majority feel some change is needed to articles

13 and 14 to reflect the environmental issue (though not necessarily in the way

suggested by the ISU) (BISHOP, 2006).

Charles Hume, the Chairman of the Salvage Sub-Committee of the International

Group of P&I Clubs, in his paper on the Hawaii meeting. strongly opposes the

amendments proposed by the ISU.

It is easy to paint the P&I Clubs as the bad guys because they don't like

'environmental salvage'. Surely, people say, it must be 'a good thing' - a bit like

'corporate social responsibility'; how could anyone possibly gainsay the importance of

preventing or minimising damage to the environment or the taking of practical steps to

do so? Well the answer is that we don't (MLAUS, 2013). The Chairman went on to

say that the P&I Clubs have previously expressed that there should be an incentive to

salvors, specifically to avoid environmental damage, when the prospects of a low or

total lack of award would otherwise discourage them from doing so.

Firstly, The discussions which led to the introduction of LOF 80, and the original

exception to 'no cure no pay' by means of the safety net for laden tankers, secondly

the discussions which led to the Salvage Convention 1989 and the extension of the

exception to no cure no pay' to encompass the 'special compensation' provisions of

Article 14 of the Convention - providing a greater incentive to salvors to prevent orminimise damage to the environment, or so it was thought at the time and lastly the

discussions with the ISU and property underwriters between 1997 and 1999 which

were triggered by the case of the 'Nagasaki Spirit' and led to the introduction of

SCOPIC on 15` August1999. Apart from the many other benefits for salvors, property

underwriters and Clubs which SCOPIC provides, it should be remembered that one of

the drivers as the Clubs were concerned was enabling them to take an increasingly

participative role in casualty management to ensure that their exposure to

environmental damage claims was minimised. SCOPIC has delivered on that

objective as well (COMITEMARITIME, 2010).

Therefore, the Clubs claim that they are not opposed to the salvors being fairly

remunerated for their efforts in preventing or minimising damage to the environment,

and in addition the Clubs emphasise that the salvors are already fairly remunerated.

Mr. Humes adds: What then is this concept of an 'environmental salvage' award

which the ISU, and others who believe it to be a 'good thing', get so excited about?

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Well, we wish we knew - its outlines are so vague and imprecise, its suggested

mechanisms so potentially uncertain and unwieldy that we have yet to comprehend it

(MLAUS, 2013).

Later in his paper, Charles Hume underlines that even if the Clubs were of the idea

that SCOPIC could provide everything that environmental salvage needed, they

participated in the Environmental Salvage Working Group of the Lloyds Salvage

Group to hear the ISUs explanation of it. After the meeting, the Clubs sent an email to

the ISU and the property underwriters to which they received no actual response.

To summarise the extensive notes that we took, we understood that the ISU and

property underwriters would get together to formulate a proposal to the ICS and Clubs

which would, by way of worked examples, be sufficiently clear, substantial and

tangible for us to understand, and

which would demonstrably improve casualty response and confer benefit on those

currently paying for casualty response, and:

which would identify what, if any, elements of the current casualty response regime,

specifically the notable practical benefits and certainties of SCOPIC, would be either

retained or adjusted, and

which would address the ISU's concern that they are not adequately remunerated for

what they do to `salve' the environment, and

which would address the property underwriters' concern that there is unfairness inthe allocation between property and P&I of the current cost of environment protection.

For our part, we undertook to consider seriously any proposal which fulfilled these

criteria with an open and constructive mind. You accepted that if the proposal did not

at least satisfy the second bullet point above, the ISU saw no purpose in pursuing ES

as an idea in any event." (COMITEMARITIME, 2013).

CURRENT CLUBS POSITION

The P&I Clubs see SCOPIC as being the solution, which has successfully dealt with

the unworkable conditions of Article 14 over the past 12 years. Moreover, they claim

that it is not the sates concern as to who pays. From their provision, the 1989

Salvage Convention operates in an effective and satisfactory way with a mechanism

to prevent damage to the environment. According to the Clubs, it seems highly

unlikely that someone will be able to demonstrate a clear and well-documented

compelling need to amend the Convention. As far as Article 13.1 (b) is concerned, it

requires that the reward shall be fixed with a view to encouraging salvage operations

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and that arbitrators should take into account the skill and efforts of the salvors in

preventing or minimising damage to the environment. The Clubs insist that the

mechanism already exists and salvors should continue to use it, and therefore they do

not see why a change in the wording is needed (MLAUS, 2013). Hume accuses the

Union of not being true environmental altruists and what they really want is an

additional revenue stream.

Just before his conclusion, the Chairman says that many commentators have pointed

to the inherent practical difficulties of an environmental salvage award. As a result, if

Article 14 is said to be commercially impractical, then the environmental salvage is

likely to be even harder to establish: There is an inherent and intellectually fatal flaw

in trying to align environmental salvage with property salvage: if it is to be done, it

must logically be proportional to quantifiable savings in liability for environmental

damage. This is impossible to demonstrate (MLAUS, 2013).

At his conclusion, Mr. Hume finds it difficult to believe how the ISU has beguiled the

CMI into spending so much time on the remote possibility of revising the Salvage

Convention. It is also disappointing to him that the ISU stopped the dialogue with the

Clubs regarding the environmental salvage issue. The P&I Clubs, in the papers last

paragraph, emphasize their commitment to the salvage industry by agreeing to

increase SCOPIC rates (COMITEMARITIME, 2013).

It is quite obvious that the P&I Clubs are strongly against any amendment proposed

by the ISU and as it is clearly understood by the nature of Mr. Humes paper, that they

are willing to remain opposed to the Union for their own gain.

ICSs POSITION

The International Chamber of Shipping, which represents 80% of the worlds

merchant fleet (GCAPTAIN, 2013) in its paper on the Unions proposal, focuses on

the financial difficulties claimed by the ISU. Shipowners and their insurers are seeking

to maintain a vibrant and viable salvage industry (words used by the ISU) for their

own benefit as well. The Unions strongest argument when trying to persuade the

other players involved in salvage is that the industry is having financial problems and

in order for the problems to be overcome, more funding is needed. The ICS, as well

as the P&I Clubs, requested more detailed information, but the ISU could not verify

their claim.

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The salvors second reason for introducing the concept is that, over the past decades,

environmental awareness when there is an incident has risen, and quite often

environmental protection takes priority over simple salvage operations for saving

property. The Unions claim is that under this scheme, the operations performed for

protecting and saving the environment are of enormous benefit to the liability insurers,

as the pollution liability is then reduced. However, the salvors are not entitled to an

environmental award which would reflect the benefit to the P&I Clubs interests.

Consequently, the salvors claim that they are not properly rewarded under the present

LOF and the 1989 Salvage Convention.

The ICS though is not yet persuaded that there is a need for a separate environmental

salvage award.The ICS remains deeply skeptical about the proposal for a separate

environmental salvage award, especially as salvage services are already generously

rewarded under the present system. said the ICS Insurance Committee Chairman,

Matheos Los (GCAPTAIN, 2013).The Chamber claims that the concept discussed is

quite similar to the liability salvage concept which was discussed during the

negotiation of the 1989 Salvage Convention and which was finally rejected in favour of

Articles 13 and 14 and also SCOPIC. The ICS, after briefly referring to SCOPIC,

mentions that the tariff rates increased significantly in July 2007 and, as a result,

SCOPIC provides salvors with the certainty of a reasonable and profitable reward for

preventing or minimising damage to the environment in cases which might otherwisenot be financially attractive i.e. where prospects for success (and therefore the

earning of a traditional Article 13 award) are slight (COMITEMARITIME, 2013).

After giving a short background to Articles 13 and 14, the ICS paper emphasises the

fact that negotiated compromises were made between the various interests in a

salvage operation. It is apparent from this that to unravel one part would entail

unraveling all aspects. All principles taken into consideration when negotiating the

Salvage Convention reflect the present concepts in public law Conventions where all

parties share responsibility for the environment and, at the same time, they seek to

ensure that salvors are given an incentive to assist ships which may be considered as

a threat to the environment.

The Chamber notes that in the ISUs paper to the LSG Working Group, the

environmental salvage award proposal is likely to alter the basis of salvage operations

as the prime concern would no longer be to salve property. As Lord Mustill explained

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in the Nagasaki Spirit case in 1997, the Convention should, by no means, create a

new distinct category of environmental salvage which would finance salvors to keep

their vessels in readiness for saving the environment. The primary purpose for salvors

would be providing assistance to ships in distress, for which the primary incentive is a

traditional salvage reward. Prevention of damage to the environment is an incidental

benefit of some operations which deserves financial recognition by way of special

compensations and not by a freestanding reward.

Concluding, the Chamber believed that the basis proposed by the ISU for assessment

of environmental salvage awards threatened damage to the environment is very

broad. Given the presence of bunkers on all ships, this basis could then be used in all

salvage operations. Quantifying an environmental award would be difficult and, as a

result, any method of assessment based on the extent to which a salvor has

minimised or prevented damage to the environment would inevitably be hypothetical

(COMITEMARITIME, 2013).

The ICS clearly stands against any amendment of the existing Salvage Convention,

just like the P&I Clubs have already done. Their paper includes proof that any

amendment is not to their benefit and interest, and the language used is much softer

than the one used in the Clubs paper by Charles Hume. By invoking Lord Mustills

sayings on the Nagasaki Spirit case, the Chamber makes is position even stronger

and well documented. In order to maintain a bond with the salvage industry and nothave them totally against them, the Chamber adds: ICS notes that the International

Union of Marine Insurance (IUMI) also believes that the proposals require further

detailed consideration, not least to ensure shipowners agreement, and that the

discussion should therefore be put back until 2016 (GCAPTAIN, 2013).

THE OUTCOME OF THE BEIJING CONFERENCE 2012

Back in December 2008, the ISU wrote to the CMI and, after reminding them that the

1989 Conventions was almost 20 years old, and 30 years had already passed since

its drafting begun, they suggested that a revision of certain aspects was necessary.

The CMI set up an International Working Group and sent two questionnaires to the

NMLAs in 2009 and 2010. There have also been two IWG meetings and a Colloquium

at Buenos Aires in 2010.

The first questionnaire regarding Article 13 is as follows:

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4.3 Do you think it would be appropriate to specify in this Article that in container ship

cases the vessel owner only is responsible for the payment of claims (and therefore

would be responsible for the provision of security) subject to a right of recourse

against the other interests for their respective shares?

Article 13 paragraph 2 provides that:

"Payment of a reward fixed according to paragraph 1 shall be made by all of the

vessel and other property interests in proportion to their respective salved values.

However, a State Party may in its national law provide that the payment of a reward

has to be made by one of these interests, subject to a right of recourse of this interest

against the other interests for their respective shares. Nothing in this article shall

prevent any right of defence" (COMITEMARITIME, 2013).

Three NMLAs reported that in their countries their legislation places liability with the

shipowners. Four NMLAs claimed that it would benefit the Convention to identify the

shipowner as the one who is responsible for paying claims and the provision of

security in container cases. The rest of the NMLAs did not consider it necessary to

make special provisions for container ships.

As far as Article 14 is concerned, the questionnaire sent included the following:

5.2 Do you consider that consideration should be given to amending article 14 in order

to create an entitlement to an environmental award? (It is recognised that there are

"political" issues involved as to who would pay for such an award but the IWG wouldbe interested to know whether your MLA would be in favour of an investigation of this

issue. It is also recognised that if you answer this question in the affirmative,

consequential changes may need to be made to the definition of "damage to the

environment" in article 1(d), to article 13, article 15 and article 20).

Ten NMLAs were for the consideration of the environmental salvage issue and seven

were against it. Two of the remaining expressed no opinion, and four recognized that

some change may be necessary. Only one was open to persuasion. The German

MLA hoped that the competing parties would first negotiate a resolution. The

Norwegian MLA pointed out that the increased focus on the environmental side of

casualties suggested that Article 14 needed to be drafted to encourage professional

salvors to maintain dedicated vessels and equipment and be ready to prevent

environmental damage. Some NMLAs pointed out that SCOPIC is the indication that

Article 14 had not worked. The arguments in favour of the amendment are based on

the changing face of salvage, and on the fact that salvors are not properly rewarded

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when there is low salved value. Those against the amendment focused mainly on the

unpredictability of an environmental award and the need to share the liability for any

such award with the property owners and their insurers.

Regarding the second questionnaire that was given to the NMLAs, information was

sought with a view to ascertaining how much empirical data was available to support

the salvorsproposals. Data was sought as to the number of claims made by salvors

that had resulted in a modest reward by reason of the low salved value. Up to today,

eleven NMLAs have responded and none of them is able to provide an example of an

instance where a salvor declined to be involved because of the low value of the

property to be salved. Similarly, no examples have been reported in which authorities

prevented the completion of a salvage operation and consequently deprived the

salvor of a possible award. Same responses also suggest that Article 14 awards do

not permit a profit element to be incorporated and there are no examples of any uplift

being applied to an Article 14 award.

The conclusion of the Beijing Conference is that some matters should be put forward

to the IMO as amendments worthy of consideration to the Salvage Convention.

Forwarding a draft Protocol to the Salvage Convention to the IMO (bearing in mind

IMO Resolutions A500(XII) and A777(18)).

Forwarding a report to the IMO identifying the issues which have been debated and

the conclusions reached.

Alternatively the Conference may like the CMI to suggest that in light of the debate at

the Conference, consideration needs to be given to amending the LOF to take

account of these discussions.

The Conference may, on the other hand, consider that no further action should be

taken by the CMI on the issue of salvage at the present time (COMITEMARITIME,

2013).

The final sentence summarises the outcome of the Beijing Conference. The ISU

proposals regarding the environmental award were not accepted by the CMI and

therefore no further action has been taken.

ISUs RESPONSE

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The Union, after the unforeseen outcome of the Beijing Conference, responded

through the following statement:

The International Salvage Union (ISU) is disappointed that the CMI Conference in

Beijing did not support its proposals for modest change to the 1989 Salvage

Convention. ISU is nevertheless grateful to those countries which did support change.

The proposals were intended to introduce a salvage award that recognises salvors

efforts to protect the environment during salvage operations.

Members of the ISU provide a vital service to the shipping industry, often working in

challenging and dangerous conditions. ISU will continue to work with shipowners, the

insurance community, maritime lawyers and other relevant parties and pursue all

avenues in order to ensure that salvors are properly rewarded and that the framework

within which salvage operations are conducted encourages innovation, investment

and global readiness to intervene in casualty situations(COMITEMARITIME, 2013).

CRITICAL EVALUATION OF BOTH POSITIONS

After having seen and examined both sides positions regarding the amendment of the

1989 Salvage Convention, concerning Articles 1, 13 and 14, the author is now going

to critically evaluate the arguments set by both sides for and against the amendment,

use the data provided by the interview with the current ISU president Mr. Andreas

Tsavliris and, finally, give an answer as to whether the ISU is right in asking for anamendment of the 1989 Salvage Convention.

The P&I Clubs, the ICS and the CMI are those who stand against the proposed

amendments by the ISU. Their basic argument is that any problematic provisions of

Article 14 have already been settled with the introduction of SCOPIC. Under this

scheme, salvors are generously rewarded and the environmental factor is also

considered (MARSECREVIEW, 2013). It is more than obvious that the P&I Clubs, by

accepting the SCOPIC solution, realized that Article 14 had some issues regarding its

proper function. By introducing SCOPIC they feel that salvors are now generously

rewarded (MARSECREVIEW, 2013) and all incentives are given to them to intervene

in salvage operations when there is a threat to the environment (COMITEMARITIME,

2013).

The ISU, on the other hand, keeps on referring to SCOPIC as a safety net, rather

than a remuneration method. Problems arising concern the person who will be the

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environmental award when they are paid under LOF or SCOPIC, even if prospects of

a low or no award exist. It is unlikely for them that the Union can really prove that the

current system is not working well. The common belief between the Clubs is that the

ISU are not environmentally altruistic, but they are seeking more revenue. Moreover,

the ICS adds another dimension to their counter arguments. The Chamber claims that

with the introduction of a separate environmental award, the prime incentive of

salvage is missing and is likely to become extinct. Salvors would then have as their

priority obtaining the award and not salving property. The ICS uses Lord Mustills

decision on the Nagasaki Spirit case, where he concluded by saying that the primary

concern in salvage should be helping ships in distress. Anything more than that

(salving the environment) is already recognised under Special Compensation and

should not be altered by a freestanding award.

Something that is also used as an argument by the Chamber is that the wording used

by the ISU, threatened damage to the environment, regarding the environmental

award, is very broad. What should be considered a threat to the environment? All

ships carry bunker fuels. Under this scope, all salvage operations can claim an

environmental award. Nevertheless, the ICS remains conciliatory and leaves room for

discussion after 2016. Finally, the CMI is using the outcome of the Beijing Conference

as its decision. No further action should be taken, regarding the ISUs proposal for

amendment.

Basically, all key players who do not wish Articles 13 and 14 be amended do not want

to pay more money, especially in the present financial climate. An environmental

award is likely to be added to their expenses. They all feel that SCOPIC is the solution

that already exists for what the salvors are asking for, and as a result there is no

reason for an extra award. Moreover, the prime incentive of saving cargo and ships in

distress will be lost and salvors would only intervene in cases where environmental

threats exist in order to receive greater financial reward.

Salvors, on the other hand, make it clear that their revenue is small, and they can no

longer remain competitive in terms of equipment needed and effectiveness. SCOPIC

is not enough for them, as it is considered to be a safety net rather than a

remuneration method; nevertheless it has worked extremely well. A tribunal, too often,

is unable to give full effect to this provision because of the low value of the salved

property from which the award is made (MARINE-SALVAGE, 2013).

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According to Mr. Andreas Tsavliris, the current president of the ISU, the Union would

like to see a number of changes to SCOPIC; however these amendments are

opposed by shipowners and insurers. SCOPIC has worked well since its introduction

in 1999, but it is not perfect (TSAVLIRIS, 2013). Another issue raised by those

against the amendments is that LOF is working well and there is no decline in cases.

The ISU have recently stated though that the number of LOF cases is declining. Mr.

Tsavliris adds that: The data from Lloyds speaks for itself.

Year by year trend of vessels involved in LOF services. Source: Lloyds, 2013

Analysis of LOFs, including the stripping out of numerous small yacht salvages

undertaken on LOF, shows that the use of LOF is still in decline. Modern

communication is the most influential factor on the decline of LOF. Prior to satellite

and mobile communication the Master had autonomy in deciding whether to accept

LOF; this decision is now made by the shipowner and/or his underwriters. A

secondary re