1

CONTENTS

ABSTRACT p.4

CHAPTER 1 p.4

INTRODUCTION p.4

CHAPTER 2 p.5

METHODOLOGY p.5

CHAPTER 3 p.7

LITERATURE REVIEW p.7

1910 BRUSSELS CONVENTION p.7

LLOYDS OPEN FORM 80 p.8

THE REOAD TO THE 1989 SALVAGE CONVENTION-LIABILITY SALVAGE p.10

CHAPTER 4 p.11

THE SALVAGE CONVENTION 1989 p.11

THE NAGASAKI SPIRIT CASE p.12

SCOPIC p.13

CHAPTER 5 p.14

BUREAU VERITAS REPORT p.14

LOF 2011 LSSA p.15

CHAPTER 6 p.16

DISCUSSION AND ANALYSIS p.16

ARTICLE 1 (d) p.19

ARTICLE 13 p.19

REVISED ARTICLE 14 p.20

OBJECTIONS RAISED p.23

CURRENT CLUBS POSITION p.25

ICSS POSITION p.26

OUTCOME OF THE BEIJING CONFERENCE 2012 p.28

2

ISUS RESPONSE p.31
CRITICAL EVALUATION OF BOTH POSITIONS p.32

CHAPTER 7 p.38

CONCLUSION p.38

REFERENCES p.40

APPENDIX p.45













































3


WHY SHOULD THE SALVAGE CONVENTION 1989 BE AMENDED?
ABSTRACT
This dissertations aim it to critically evaluate the International Salvage Unions
proposals for amendment of the 1989 Salvage Convention. After explaining the ISUs
proposals for amendment and identifying and examining any objections raised by
those who are against the amendments, the author is going to evaluate all arguments
provided and come up with the answer as to why the Convention should be amended.
The environmental aspect of the Convention will be mostly discussed, as Article 14
seems to be the most discussed of all, and the one in which salvors are mostly
interested in amending. Along with Article 14, Articles 1 and 13 will be further
analysed.

Chapter One
INTRODUCTION
The Salvage Convention 1989, which was held in London, was adopted on the 28
th
of
April 1989, but came into force seven years later, on the 14
th
of 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 and 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 their 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 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 to be located in January 2011. Other contracts used, are the Beijing
Form, the Japanese Form and the Turkish Form, yet the LOF remains the mostly
preferred contract worldwide (MARINE-SALVAGE, 2013). Under the LOF, the salvers
receive a proportion of the salved value, 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 minimized, or
prevented damage to the environment, but the value of the salved property is
insufficient for a whole salvage reward. The second choice the salvers have, is to
4

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
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 t during their salvage services (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 requests for this amendment and which are the arguments
which will be used for the amendment. The second objective is going to identify and
examine any objections raised to the ISUs proposals and by whom. The Committee
Maritime International (CMI), for example, has been opposite to the Unions proposals
for extra funding.
After identifying, explaining and examining the arguments and the counter arguments
for the Unions proposals, this dissertation will have the evidence and will be able to
provide an answer as to why the Salvage Convention 1989 should be amended.

Chapter Two
METHODOLOGY

After specifying the aim and the objectives of the dissertation, the author is going to
analyse 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 one works from
the more general to the more specific reasoning, also known as a top-down
approach. On the top of this scheme, there is a theory which the author uses as a
start point. The next step is to narrow this theory and extract one or even more
hypotheses, which need to be tested. The outcomes of these hypotheses are the
5

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 approach method, also known as bottom up is called inductive and its
flow is vice versa than the deductive one. Starting from specific observations, the
author through a procedure, reaches to generalisations and theories. After having
achieved these specific observations, the author tries to detect patterns and
regularities, through which they can formulate a number of tentative hypotheses. 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 fitted 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 ends up
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, updated and unlikely to contain any kind of prejudice by
the author.
The secondary research which was carried out, is mostly based on carefully checked
online documents like articles, websites and fora, as the information provided there
are updated, documented and easily controlled, so that the qualitative character of the
information remains high. Moreover there was extensive reading and information
collection on books and journals as well.
The primary research contains an interview with the current president of the
International Salvage Union Mr. Andreas Tsavliris. His job position, and the
information provided by him, regarding the main subject of this dissertation were of
great importance. Having to deal with the most important requirement 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 the most appropriate and important one.
The interview scheme was preferred instead of a questionnaire, as the one-to-one
communication is better than a questionnaire which will be handed and the results are
more accurate. Due to the heavy program of Mr. Tsavliris, the interview was held
through a number of emails, while Mr. Tsavliris was away. The interviews genre was
6

semi-structured. The author asked some pre-arranged questions, but the answers
given, raised some new questions which were then asked.

Chapter Three
LITERATURE REVIEW
The life of a vessel is usually long enough to take her through all the troubles and
pleasures of life, but perhaps the most interesting part of her career is rescuing or
being rescued (James & Dewell, 1912).
The International Convention on Salvage 1989 starts with a chapter on general
provisions that after giving definitions cover different aspects to which this convention
is applicable and provide a hand full of areas where it is applicable. The second
chapter deals with performance of participating parties and this also gives details of
the cooperation among the parties. Third chapter actually gives details of rights of
salvors that mean what are conditions for reward, criteria for fixing reward and other
such matters. Fourth chapter explains what claims and actions may involve in the
course of action and how to deal with such cases. This is lengthiest chapter of the
whole convention as it explains wide areas of the actions.
The extent to which the language is concerned it is well knitted, easy to understand,
poignant and simple. Proper headings, articles and numbering make the data sorting,
searching and citing well organized and time saving. It very logically starts with
definition 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 rational reason.
The next step in literature review is comparison of different works of the same kind of
the literature.
It is interesting to know that American Admiralty law gives more reward materially to
the salvor of material as compared to the salvor of human beings. So, if a man saves
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 on the part of morality and it is supposed that every
man would do everything possible to save humanity. This was until the 1910 when the
great maritime nations of the world agreed to put the legal compulsion 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 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 is logical basis of International
Convention on Salvage 1989. It was concluded on 23 September 1910 in Brussels,
7

which is why it is called Brussels Convention. It provided basic frame for the
legislation of Salvage. However this convention was limited regarding the uniformity
regarding the salvage operations for example its rules were limited and did not explain
much about the compensation and liability of salvors.
After determining the meaning of salvage operation and the geographical area in
which a salvage operation can take place, the Convention specified whether an
operation can be subject to remuneration or not, and which should be the amount of
the reward. Article 2 clarifies that the right to equitable remuneration can only be
claimed by every act of assistance or salvage, which has had a useful result.
Therefore lack of beneficial result, leads to no remuneration. Additionally, in no case
should the sum paid to the salvors exceed the value of the property salved.
Reference to the amount of money that should be paid to the salvors is made in article
6 of the 1910 Convnetion. This amount is fixed by agreement between the two parties
and, failing agreement, by the court. The same applies also to the proportion in which
the remuneration is to be distributed amongst the salvors. In any case of agreement
vitiation by either party, regarding the services, or the remuneration paid, the court is
responsible to provide the final solution, at request of the party affected.
Moreover, it lacked articles regarding environmental protection and measures to
minimize the damage to environment. Its basis can be traced in the general
awareness regarding environmental protection prevailing at that time. The revolution
in industrial world was still at its peak and new innovations and inventions were being
made in every field of life. Human thought had not developed to the extent that it
might see the danger that the environment was exposed to by these ships or vessels.
No doubt some individual thoughts were prevailing at that time but proper legislation
was not present anywhere till some incidents made it clear for the world that it was far
more dangerous than a man can think of.
The first amendment in the 1910 convention was made in 1967. This amendment did
not change anything except the addition of warships or other military vessels were
also included in the salvage list. Thus Convention on salvage is one step forward
towards more environment friendly laws and regulations. Amoco Cadiz disaster
became the major reason to update the old convention in the form of convention on
salvage 1989. Amoco Cadiz was a supertanker on its journey to Europe carrying
crude oil from Iran and Arabian countries and was wrecked at northern Brittany coast
in April 1978. The result was disastrous as 223000 tons of crude oil spilled out
polluting the area of almost 360 km. the huge population of bivalves, limpets, sea
birds, periwinkles and limpets severely affected by this impact. Life cycles have
changed. Short living creatures have been replaced by the long living species. The
8

effect is both long term and short term, no one is surely how long will it take neutralize
(G, G, & D, 1982).
One of Many changes that enhanced the scope of convention on salvage 1989 from
previous conventions include environmental protection as leakage of oil or other such
material from ships had a disastrous affect on sea environment thus many changes
were made for this purpose. A special compensation was awarded to encourage the
salvors to make attempts to preserve and protect 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 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
environment and human activity.
If the conventions like 1910 and 1989 are compared, it can be observed that behind
these had been special factors that made concerned men to amend according to the
requirement of the time. At the time of 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 in this
convention in 1967 was also due to some social factors. After the Second World War
there was huge increase in the sea weapons, in the shape of vessels and warships,
as huge money was used to build such gigantic weapons and weapon carriers, thus
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 1989 convention came into being.
No doubt, salvage conventions belong to the same category however convention on
salvage 1989 is more convincing as compared to the previous one as many
provisions prove it to be more helpful and beneficial for both the man and the
environment.
There is a huge discrepancy between law of savage and UNESCO convention on the
prevention of underwater heritage. This institution of UN aims at saving the heritage
buried at the bottom of the seas in the form of ancient and historical shipwrecks. The
issue arises from an article of convention which states that reward of the salvage
operations would depend upon the nature and degree of the danger (Organization,
9

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).
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 to be applied. The
property and carrier should be on navigable waters, the rescue efforts to save
property should be voluntarily rendered, success that might be total or partial and
conduct with the 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 are arise when it is compared with the convention of UCH. The question
that how is the law of salvage 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 realization loss. In
contrary to this others give a narrower approach. In both cases there is not a single
detailed interpretation from the court in either way. Court has left it to the legal system
of 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 reduces it to 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 gigantic sizes of vessels have made the process of salvation very
difficult and very expensive. Moreover, there is also needed a large vessel that might
save the vessel in danger. (Gaskell, 1989)
As the time has become faster and usage of internet and other hi-tech equipments
has made some articles of convention on salvage 1989 ineffective in today's world. A
dire need is felt these days for modification, revision and up gradation of this
10

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 in 1989 where
until the last hour there was read danger that agreement would not be reached in
time. (Michael, 1990)
As the time progresses, everything develops and it becomes necessary to update the
current paradigms according to the challenges of the world. Same is the case with the
convention on salvation. There have been many articles that are forcefully discussed.
There may be some elements of incontinence among these parties but one thing is
real important that this is kind of war of interests. Everybody tries to get maximum
share in this war.
Moreover there are two types of salvors. One those who are professionally providing
salvage services to the sea vessels and ships are earning healthy earning in the form
of rewards and got from the ships and governments whose ships and vessels are
being saved from danger. 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 in the seabed. Nobody knows how much treasure
these wrecked vessels and ships have in their hearts. These treasure hunters do not
pay attention to the preservation of underwater cultural heritage. These along with
many other challenges combine to make a whole series of challenges that the
convention on salvage 1989 is facing in 21
st
century.
The remuneration is offered after observing the measure of success obtained, the
efforts and deserts of the salvors, the danger run by the salved vessel, crew,
passengers and her cargo, by her salvors, and by the salving vessel, expenses
incurred and losses suffered, time expended, risks of liability and the value of the
property salved, are some of the considerations which will be taken in mind 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 is a company that provides the remuneration amount to the
salvors for their services at the sea. It was started in 1980 when the services of a
salvor rendered on the basis that the amount of remuneration would be fixed by the
decision of the committee of the Lloyd o the arbitrators appointed by the committee.
Thus Lloyd became a mean of standard and can be a neutral party whenever there is
any kind of dispute between the parties regarding the remuneration of services. It has
got high praise regarding its final modification regarding the oil pollution in seas and
11

open waters. Lloyd has offered a safety net provision in this regard, which means the
salvors, while operating their services, are required to use their best endeavors to
prevent oil spill from all types of vessels and not just laden or partially laden tankers. A
point can be raised at this point that the provision does not bind the salvors to take
any specific kind of measure to prevent the environment from the danger of the oil that
has already escaped or still escaping. It just tries to save the material on the ship or
vessel. However, the salvors efforts, regardless the success, are then compensated.
(Donald & O'May, 1983).
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 results coming from the salvors
efforts. This newly introduced scheme reflected an ever-increasing worldwide
awareness of the effects of oil pollution on the environment.
1910 BRUSSELS CONVENTION
The 1910 Brussels Convention for the Unification of Certain Rules of Law respecting
Assistance and Salvage at Sea was the first ever convention to determine a salvage
operation and the remuneration which should be given if certain criteria were met.
Under article 1 of the 1910 Convention Assistance of seagoing vessels in danger, of
any things on board, of freight and passage money, and also services of the same
nature rendered by seagoing vessels to vessels of inland navigation or vice versa, are
subject to the following provisions, without any distinction being drawn between these
two kinds of service (viz, assistance and salvage), and in whatever waters the
services have been rendered (ADMIRALTYLAWGUIDE, 2010).
After determining the meaning of salvage operation and the geographical area in
which a salvage operation can take place, the Convention specified whether an
operation can be subject to remuneration or not, and which should be the amount of
the reward. Article 2 clarifies that the right to equitable remuneration can only be
claimed by every act of assistance or salvage, which has had a useful result.
Therefore lack of beneficial result, leads to no remuneration. Additionally, in no case
should the sum paid to the salvors exceed the value of the property salved.
Reference to the amount of money that should be paid to the salvors is made in article
6 of the 1910 Convnetion. This amount is fixed by agreement between the two parties
and, failing agreement, by the court. The same applies also to the proportion in which
the remuneration is to be distributed amongst the salvors. In any case of agreement
12

vitiation by either party, regarding the services, or the remuneration paid, the court is
responsible to provide the final solution, at request of the party affected.
The measure of success obtained, the efforts and deserts of the salvors, the danger
run by the salved vessel, crew, passengers and her cargo, by her salvors, and by the
salving vessel, expenses incurred and losses suffered, time expended, risks of liability
and the value of the property salved, are some of the considerations which will be
taken in mind 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 last articles of the Convention (19 in total) are referring to the bureaucratic
procedures and the exact time of it entering into force. One year after signing the
Convention (23
rd
of September 1910), the States interested would ratify it and when
ratifying, the Convention would need one more year before coming into force
(ADMIRALTYLAWGUIDE, 2010). The Convention came into force on the first of
March, 1913 and its first amendment took place fifty four years later, with the 1967
Protocol to amend the Convention for the Unification of Certain Rules of Law relating
to Assistance and Salvage at Sea of 23 September 1910 (CIL.NUS, 2009).
What can be noticed, after having addressed the most important parts of the 1910
Convention, is that at no place is there a reference to environmental issues regarding
remuneration. The strict character of the Convention as to no cure-no pay scheme,
leaves little scope to environmental concerns. Environmental awareness was not of
high standards at the beginning of the 20
th
century and as a result, maritime subjects
prioritised their concerns on a completely different way than present times. No cure-no
pay scheme, as introduced under Article 2, was depriving salvors from concerning
themselves with some salvage operations that seemed difficult to handle and cope
with. The risk of earning a big remuneration was far less than actually failing with the
operation, and not receiving any reward, despite their effort costs.
The amendment Protocol of 1967, changed nothing in particular, regarding the
environmental issues, or the no cure-no pay basis. All amendments decided,
concerned the war ships or any other State or Public Authority vessels, which were
excluded by the 1910 Convnetion. In other words, salvage operations could now take
place in these types of vessels also (ADMIRALTYLAWGUIDE, 2010). As a result the
incentive for the salvors to take on such operations as mentioned above, remained
little.

LLOYDs OPEN FORM 80
13

The Lloyds Standard Form of Salvage Agreement, or Lloyds Open Form (LOF), as it
is commonly recognized, provides a regime for the determination of the remuneration
amount to be awarded to salvors for their services in saving property at sea (Lloyds,
2013). The first Lloyd's salvage agreement goes back to 1890 when, at the
instigation of a salvor in the Dardanelles, a salvage service was rendered on the basis
that his remuneration would be fixed by the decision of the Committee of Lloyd's, or of
arbitrators appointed by the Committee( OMay, 1983). Having its origins back in
1892, the first standard form was approved by the Committee of Lloyds. After a
number of revisions, the contract took its final form in 1908. Since then, various further
revisions have taken place, but the most significant occurred in 1980, with the
publication of Lloyds Open Form 1980, or LOF 80 (COMITEMARITIME, 2013). Until
then, the no cure-no pay principle existed in all LOFs and as a result, no specific
discussion about environmental issues had taken place. As environmental concerns
came increasingly to the fore in salvage operations towards the end of the last
century, the commercial parties to the salvage contract addressed this difficult issue
through the contractual provisions of LOF 80. The most important features of LOF 80
relate to the prevention of oil pollution, and the remuneration for this act, and the so
called safety net provision.
The salvors, while operating their services, are required to use their best endeavours
to prevent oil spill from all types of vessels and not just laden or partially laden
tankers. The clause, whatsoever, does not cover the taking of measures to reduce or
prevent oil pollution which has already escaped and moreover that the duty to use
best endeavours extends to prevent the escape of a vessels bunkers which are made
subject of salvage.
The safety net provision requires the salvor to exercise a certain degree of skills and
care in order to prevent or minimize oil pollution when performing a salvage operation
on laden or partly laden vessels. The salvors efforts, regardless the success, are then
compensated. In order for the safety net provisions to apply, the salvors there must
be no negligence from them, their servants, agents, or any other persons related to
the salvage operation, which contributes to the rendered operations not being
successful, partially successful, or preventing the salvors from completing their work.
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 (MARITIMEJOURNAL, 2013).
Under this scheme, the shipowner should reimburse the salvors for their expenses,
plus a supplement up to an additional 15 per cent, which would depend upon the
value of the results coming from the salvors efforts. This newly introduced scheme,
14

reflected an ever-increasing worldwide awareness of the effects of oil pollution on the
environment. Although LOF 80 introduced significant changes to the existing salvage
contracts and to the way environmental awareness was seen, major pollution
incidents during the 1980s, like the EXXON VALDEZ incident in 1989 when 10.8
million gallons of oil were spilled into the marine environment (GCAPTAIN, 2013),
ensured increasing pressure from the environmentalists, which eventually led to
further significant change in the salvage industry (COMITEMARITIME, 2013).



THE ROAD TO THE 1989 SALVAGE CONVENTION LIABILITY SALVAGE
In September 1979, the Comite Maritime International (CMI) established an
International Subcommittee under the chairmanship of Professor Erving Selvig. The
Subcommittees task was to study the subject of salvage and prepare a report with
any worth mentioning issues for the upcoming Montreal Conference in 1981. For the
replacement of the 1910 Salvage Convention, a new Salvage Convention was drafted
by an International Working Group (IWG). At the 1981 Montreal Conference a draft
text was approved by the Assembly and forwarded to the Intergovernmental Maritime
Consultative Organisation (IMCO), which in 1982 was renamed to IMO
(CMIBEIJING2012, 2012).
Professor Selvigs report, discussing the salvage operations, emphasized on the
inadequate number of machineries held and established on international level by each
State. National machineries will be probably tailor-made to the needs of each coastal
state. Subsequently, most States will not be able to maintain or establish on a regional
level a salvage machinery with the overall capacity required. Therefore national
machinery role can only be supplementary. A system under which the private salvage
industry retains a main role, will be more cost effective than a system based only on
State organised salvage.
Later in his report, Professor Selvig referred to the liability salvage. He mentioned that
the salvage concept should be extended and what should be taken into account is the
fact that damage to third party interests has been prevented. As the ship which
created the danger is taking measures to avoid such damage, salvage should then
refer to the ships interest to avoid third party liabilities also. Hence, the insurers of the
ships liability who have benefit from the salvage operation, should be involved in the
salvage settlement and payment procedures.
Ship and cargo insurers cannot be held responsible to pay for the salvage operation
by themselves, when another group (liability insurers) is also benefited from the
15

operation. Under this scope, the overall costs of a salvage operation are covered
more equitably. This tactic is likely to encourage salvors to engage in salvage
operations when third party interests are in danger, especially in cases when either
the ships or cargos salvage is rather remote. These contributions from new sources
are likely to enable international salvage capacity to remain at an adequate level
(CMI, 2010).
Later on his report, Professor Selvig specified the limitations on the award earned by
the salvors and the proportion each party would have to cover. In cases where the
shipowner would not have been liable, the salvors may only recover the cost of
preventive measures, but in cases of either liability salvage or ship and/or cargo
salvage, the reward will be fixed in two stages. First the total amount and then the
amount each party has to pay.

Chapter Four
THE SALVAGE CONVENTION 1989
Almost 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 was
more than imperative. The 1910 Convention was regarded to be outdated and the
environmental concerns and awareness had significantly increased since then. On
April 28 1989, the Salvage Convention was concluded in London, but it was not after
July of 1996 that it 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 skill and efforts 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. salavage 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
Convnetion 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 by
pollution, 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.
16

In article 8(1)(b), it is specified that 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
upon 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 purpose of saving human lives as well as protecting the environment in
general. Moving in to the reward fixation, article 13(b) clarifies that the reward should
be such, to encourage salvage operations, taking into account, among others, the skill
and efforts of the salvors in preventing or minimising damage to the environment
(CMI, 2010).
Casualties such as the Amoco Cadiz (1978), Atlantic Empress (1979) and the
Christos Bitas (1978), that resulted in huge oil spills, resulted in governments refusing
a place of refuge for salvage work to be completed. As a result, salvors were towing
the vessels and led them to the open sea to be sunk. No cure-no pay scheme
prevented them from earning even their expensing costs and moreover discouraged
them to assist ships in such situations (MARINE-SALVAGE, 2013).
Those results led to the most controversial and most discussed article of the
Convention is article 14. In paragraph two the term special compensation appears
for the first time ever, in a salvage convention script. When salvors are operating
taking into account the prevention or minimisation of environmental damage, special
compensation is payable by the owner to them, which may be increased up to a
maximum of 30 per cent of the expenses. 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 just 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 of 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
them, salvors would at least recover 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 expressed their consent to be
bound by it, as this happened on July 14 1996. Finally, in article 32, any revision or
amendment may be convened by the Organisation through a conference by request
17

of at least eight States Parties, or one fourth of the States Parties, whichever is the
higher figure.
THE NAGASAKI SPIRIT CASE
On the 19
th
of September 1992, the tanker NAGASAKI SPIRIT part laden with
40,154 tons of crude oil, collided in the northern part of the Malacca Straits with the
container ship OCEAN BLESSING. It was a classic T-Bone collision and as a result
a massive fire ensued and approximately 12,000 tons of crude oil spilled in 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 by the authorities about environmental damage. Ten days later the ship was
anchored in Indonesia. The two sides (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, fair rate for equipment, personnel actually and
reasonably used in salvage operation, meant a fair rate of expenditure and did not
include any elements 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 ... are
defined 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 occurring interpreting 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 an uplift over actual cost necessitated proof that the environmental
damage would have resulted but for the salvors intervention, but also the extent of
the damage had the operation been unsuccessful. Naval architectures, 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
18

As a result from all these deficiencies mentioned above, a new clause was designed
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.
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 which needed to be filled in
the wording of the clause, like the Tariff Rates. The drafting sub-committee of
SCOPIC, towards this end, produced the amended SCOPIC 2000, which came into
effect in September 2000 (IMCBROKERS, 2013).
SCOPIC clause is an optional clause to LOF and is only included as part of that
contract if specially 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 shipowners 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 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 a rather LOF contract solution than an
international one and has claimed that problems, such as who would be the negotiator
for the rates and how would they be determined, sought 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
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 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.
19

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).

Chapter Five
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 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 by this report and is considered to be the cause of all those problems, is
that international salvage industry is in the hands of comparatively few companies.
The Union points out that these companies have shareholders seeking profit. As a
result, if the industry is generously awarded, then they would keep on sticking with it
and they will accept the risk, but if the industry is not sufficiently awarded, 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 entries have been made in the salvage industry. Reduction in the number of
salvage companies can be a reflection of mergers and the greater range of operations
being performed.

LOF 2011 LSSA
After lengthy and constructive debate at the Lloyds Salvage Groups meeting in 2010
and 2011, a number of amendments to the existing LOF have been agreed. The new
LOF is known as LOF 2011.Two new clauses have been added to the existing LOF.
The first one refers to the wider accessibility of the Arbitrators 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 Council of Lloyds of their engagement and forward the
original agreement to the Council as soon as possible (LONDONPANDI, 2013).
20

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 security 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 salved 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 salved 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 salved cargo with a value below an agreed figure may be omitted from
the salved 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).

Chapter Six
DISCUSSION & ANALYSIS
After having seen what has taken place in the salvage industry since its beginning in
the late 19
th
century and what changes have occurred, it is easy to realise that there
are two different opinions and strategies coming from two different parts of the
industry. From the one side it is the ISU, which is looking forward to the amendment of
the 1989 Salvage Convention, in order for them to be able to increase their revenues
and also, be able to remain competitive and updated in terms of technology and
equipment. On the opposite side, there are the shipowners and the insurers, who are
struggling to keep their expenses as low as possible, in order to gain the greatest
profit possible.
As a result, both sides have come up with arguments in order to support their thesis
and try to convince the opposite side to undertake and accept their proposals. At this
part of the dissertation, the author is going to refer to the two objectives mentioned in
the introduction part and analyse them. First, regarding to the ISUs proposals, there
is going to 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 raising from the parties who are against this amendment (CMI
ICS). On the last part of this section, there is going to be an analysis in terms of
critical evaluation, of the Unions proposals, which will lead to the final conclusion of
this dissertation, as to why the 1989 SC should be amended.
21

Apart from the award given for salving the maritime property, the ISU suggests a
second award that should be given to those who are taking action in a salvage
operation. This award will be given for the degree of success obtained by a salvor in
minimising or avoiding any damage to the environment during the salvage operation.
This thesis is formulated by the ISU, because the Union believes that the current
awarding system for salvors under the 1989 Salvage Convention and the commercial
arrangments under Lloyds Open Form 2011, and where applicable, the SCOPIC
2011, does 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, that the ISU raised the issue for the update of the 1989
Salvage Convnetion 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 marine industry.
A subcommittee was set up by the 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 unanimity required could not be achieved. The idea that the change
was necessary was supported by the ISU and the London Property Underwriters,
whilst the shipowners and the ICS were implacably against and content with the
current system (LAW.TULANE, 2013).
After their first failure, the Union then approached the Committee Maritime
International, which had previously drafted both the 1910 and the 1989 Salvage
Conventions and requested from them a review of the 1989 Convention to be put in
their work schedule. After accepting this request, the CMIs Council set up an
International Working Group (IWG) to examine the issue. The IWG then used the way
of questionnaire, with some 56 national maritime law associations and the subject was
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 their positions 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 awarded for
22

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
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 the 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 remuneration is not what salvors seed, the ISU president went on to give
three reasons as to why the present system has 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
23

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).
The Unions president, Todd Busch used the date problem in order to support his
positions. 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. On his second argument, Mr. Busch,
emphasized on the awards given. He claimed that the awards were given in a ship
and cargo orientation and clearly not in an environmental one. 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 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 for the environment to 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 ton escaped in the River Plate, would
undoubtedly be substantial. The same, numerical 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).
24


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 later on
incorporated into the new article 14. Below, there is the current article 13, with the
proposed amendments bolded.
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 value thereof.
(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).
25

The ISU in this new proposed article wants to clarify that the reward will be given to
the salvors, regarding the measure of success in their operation. The newly
introduced (j) paragraph, adds any other awards under the new Article 14. Salvors are
seeking 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 put out of 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 it has been previously clarified on this paper through LOF, Nagasaki
Spirit case, SCOPIC, tends to be the most controversial article of the whole 1989
Salvage Convnetion. Following numerous decisions 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 Unions proposal is to strike it out completely, and to replace it with the
following in bold.
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 the
following 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 has been 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 decision, after taking into consideration such factors
when reaching its assessment.
26

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 ship owners
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 from establishing the amount of the appropriate cap,
some were unhappy with this involvement. 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 shipowner 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 relevant. In addition, the salvor is not likely to have been successful
in preventing damage and entitled to an environmental award.
14.4 Any environmental award shall be paid by the shipowners.
Just like the present Article 14, the Unions proposal puts the shipowner to the liability
position for an environmental award rather than the cargo, as he is the one who is
liable for any pollution under modern Convnetions and Laws. The proposed
amendment to Article 14, concludes with two Articles that are in use under the current
convention.
27

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 of Article 14 result in the tribunal to be the only
responsible body for setting an environmental award. According to Archie Bishop, the
experience of more than 100 years has shown that a properly informed tribunal has
the capability to weight 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 enormous
proportions. Almost one century, 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 cannot do the same
when assessing an environmental award (SOYER and TETTENBORN). Although,
the difference lies to the point that instead of examining the loss of cargo or the
possible damage, the tribunal will now have to examine and settle 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 with 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
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 (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).
28

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
change the existing standards in salvage industry and achieve 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 on 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 on an excellent way
the CMIs current position on the subject.
On his paper, Hetherington explained that of the twenty-four responses to the
questionnaires, which were previously mentioned on this paper, filled out by the
National Maritime Law Associations (NMLAs) regarding the environment issue, the
vast majority wants an amendment to the definition of damage to the environment,
nevertheless not the exact and whole proposal 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.
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 to the
proposed amendments 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
saying that the P&I Clubs have previously expressed that there should be an
encouragement to salvors, specifically to avoid environmental damage, when the
prospects of a low or no award would otherwise discourage them from doing so.
29

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 or
minimise 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 so far 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 emphasize that the salvors already are 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?
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 the SCOPIC could provide everything that the environmental salvage needed,
they participated in the Environmental Salvage Working Group of the Lloyds Salvage
Group to hear the ISUs articulation 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
30

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 in
the 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 consist on the SCOPIC as being the solution, which has developed a
successful 12 year track record, for the unworkable conditions of Article 14. 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
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
and what should arbitrators 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 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 truly environmentally altruists and what they really want is an additional
revenue stream.
Right 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 much worse 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 revision of 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 at the papers last
paragraph, emphasize on their commitment to the salvage industry by agreeing to
increase SCOPIC rates (COMITEMARITIME, 2013).
31

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 style Mr. Humes paper, they are
willing to remain opposed to the Union for their own profit.


ICSs POSITION
The International Chamber of Shipping, which represents 80% of the worlds
merchant fleet (GCAPTAIN, 2013) at its paper on the Unions proposal, is focusing 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 of 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 detailed information but the ISU could not verify their claim.
Salvors second rationale for introducing the concept is that over the past decades
environmental awareness when there is casualty has risen and quite often this
situation 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 give an enormous benefit to the liability insurers, as the
pollution liability is then reduced or minimised. Yet the salvors are not entitled to an
environmental award, which would reflect benefit of 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 yet not persuaded that there is a need for a separate
environmental salvage award. 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 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 otherwise
not be financially attractive i.e. where prospects for success (and therefore the
earning of a traditional Article 13 award) are slight (COMITEMARITIME, 2013).
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After giving a short background of Articles 13 and 14, the paper of the ICS
emphasizes 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 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 the assistance to ships being 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 believes 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 be then used in all
salvage operations. Quantifying an environmental award would be quite 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 stands clearly against any amendment of the existing Salvage Convention,
just like the P&I Clubs have already done. Their paper includes proofs that any
amendment is not of their profit 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 their position even stronger
and well documented. In order to keep a bond with the salvage industry and not have
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).


33

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, 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 Colloqium at Buenos
Aires in 2010.
The first questionnaire regarding Article 13 is as follows:
1.2 Do you consider that the words contained in Article 1(d) of the Salvage
Convention ("in coastal or inland waters or areas adjacent thereto") should be
deleted?
1.3 Alternatively do you think words such as those used in the other Conventions (eg
"where ever such may occur"/"exclusive economic zone"/"territorial sea") should
replace those words in Article 1(d) of the Salvage Convention?
1.4 Have there been any reported cases in your jurisdiction in which the word
"substantial" (which is contained in Article 1(d) of the Salvage Convention), as used in
that definition, have been interpreted?
1.4.1 If so, could you provide a copy of the decision?
1.4.2 If there have been no such cases in your jurisdiction do you think it likely that
the word "substantial" could create difficulties of interpretation?
1.4.3 If so, do you consider that there is any other word or group of words that could
better identify what is intended by the definition? (COMITEMARITIME, 2013).
Sixteen out of twenty-four NMLAs who responded the questionnaire were in favour of
the change of words in coastal or inland waters or areas adjacent thereto with words
which refer to the exclusive economic zone. Two did not express an opinion, and of
six who did not want to amend the present wording, four recognised that the wording
could be improved.
Regarding the alteration of the word substantial referring to the damage to the
environment, two NMLAs did not express an opinion, whether the word should be
deleted, seven were in favour of the deletion and the remaining fifteen considered that
the tribunals wre well able to interpret the word satisfactorily. The Chinese MLA
favoured the deletion on the basis that its use is contrary to the trend of strengthening
environment protection, fails to reward the ordinary, non-substantial physical damage,
and finally because of the lack of clarity as to what was intended by use of the word
substantial. The Slovenian, Italian and Swedish MLAS suggested that both the
words major and substabtial should be deleted. The South African MLA which
favoured the deletion, was uncertain whether the word should be replaced and
34

queried if it was whether such words such as not trifling nor insignificant should
qualify damage to the environment (COMITEMARITIME, 2013).
Questions asked for Article 13 are:
4.2 Has your jurisdiction made any provision, as provided for in Article 13 paragraph 2
for the payment of a reward by one of the interests referred to in the opening sentence
of this paragraph?
4.3 Do you think it would be appropriate to specify in this Article that in containership
cases the vessel 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 provides liability to the
shipowners. Four NMLAs claimed that it would benefit the Convention to identify the
shipowner as the one who is responsible to pay claims and the provision of security in
container cases. The rest of the NMLAs did not consider ot necessary to make special
provisions for the container ships.
As far as Article 14 is concerned, the questionnaire sent was 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 would
be 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. 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
35

Norwegian MLA pointed out that the increased focus on environmental side of
casualties suggested that Article 14 needed to be drafted to encourage professional
salvors to maintain vessels and equipment dedicated and in awareness 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
when there is low salved value. Those against the amendment, mainly focused on the
unpredictability of an environmental award and the need to share with the property
owners and their insurers the liability for any such award.
Regarding the second questionnaire that was given to the NMLAs, information was
sought with a view to seeking to ascertain how much empirical data was available to
support the salvors proposals. 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. Until
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 wish CMI to suggest that in the 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 CMI on the issue of salvage at the present time (COMITEMARITIME, 2013).
36

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
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.
Ends (COMITEMARITIME, 2013).
CRITICAL EVALUATION OF BOTH POSITIONS
After having seen and examined both sides positions about 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 taken from the current ISU president Mr.
Andreas Tsavliris and finally, give an answer as to if the ISU is right in asking for
amendment 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, has 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 the SCOPIC they feel that salvors are now generously
37

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 rising, concern the person who will be the
negotiator and the tariff rate (CMI, 2010). Such provisions, tend to make SCOPIC
more of a law, than an actual contract and therefore, it gives no extra incentive to
salvors to intervene in operations were environmental damage is happening and
success is not guaranteed. The Clubs and the ICS insist on its use by using the
argument of LOF, being a worldwide recognised and used contract (Lloyds, 2013).
The Union answers by saying that currency rates have changed over the past years
and therefore the generosity is diminished. Subsequently, salvors are discouraged in
intervening to operation when SCOPIC is agreed and is going to be their
remuneration method.
According to Archie Bishop, there is another tricky provision regarding SCOPIC. If
SCOPIC is incorporated then it replaces Article 14 which will no longer apply. This is a
crucial point for the salvor, for if SCOPIC is included but not invoked (or is later
terminated), the salvor will not be covered by either Article 14 or SCOPIC (MARINE-
SALVAGE, 2013).
Nevertheless, SCOPIC seems to be working well in terms of use (between 1999-
2010, there have been 1008 LOF cases, in which SCOPIC was incorporated into the
contract in 30% of those cases, and invoked on 24%. At the same time there were
only seven SCOPIC-related arbitrations) (MARINE-SALVAGE, 2013). But as
mentioned above, it is considered to be a safety net provision for salvors, who feel
that they are not properly rewarded. This fact can be easily concluded by the following
numbers. The total gross income of the world salvage industry was $250 million in
2008 earned from 250 operations. $300 million was gained from wreck removals. The
salvage industry estimated that rewards are adequate in about 50% of salvage cases
and too low in the other half. Rewards are highlighted as too low in 25% of cases
where SCOPIC has been used and bare minimum paid (BISHOP, 2006).
Wording of Article 1, does not seem to be a problem or a ground for conflict between
the ISU and those opposed to the amendments. As it was concluded from the
questionnaires sent, the NMLAs were in favour of the proposed change of wording in
38

Article 1. The same applies to the CMI, the P&I Clubs and the ICS. What have been
the, so called, causes of the problem are the proposed Articles 13 and 14.
The three allies, against the proposed amendments, mainly focus to their strongest
argument that salvors are already generously paid under SCOPIC and LOF. Charles
Hume, finds it difficult to understand why the salvors request for a separate
environmental award, when they are paid under LOF or SCOPIC even if prospects of
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 altruist, but they seek for more revenues. Moreover, the
ICS, give another dimension to their counter arguments. The Chamber claims that by
the introduction of a separate environmental award, the prime incentive of salvage is
missing and is likely to be extinct. Salvors would then have as their priority to gain the
award and not salve property. The ICS uses Lord Mustills decision on the Nagasaki
Spirit case, where he concluded saying that primary concern in salvage should be
helping the ships in distress. Anything more than that (salving the environment) is
already recognized 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 accounted as threat to the environment? All
ships carry bunker fuels. Under this scope, all salvage operations can claim am
environmental award. Nevertheless, the ICS remains conciliatory and leaves a room
for discussion, after 2016. Finally, the CMI, is using the outcome of the Beijing
Conference as its opinion. 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 present time. An environmental award is likely to be
added to their expenses. They all feel that SCOPIC is the solution that already exists
to 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 threat will exist, so
that they will be able to gain more money.
Salvors, on the other hand, invoke that their revenues are little and they can no longer
remain competitive in terms of equipment and effectiveness. SCOPIC is not enough
39

for them, as it is considered to be a safety net, rather than a remuneration method,
nevertheless it has worked extremely well. Tribunal, too often, is unable to give full
effect to this provision because of the low value of the salved property from which
award is made (MARINE-SALVAGE, 2013).
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 to 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 ship owner and/or his underwriters. A
secondary reason is that LOF is perceived by many as expensive, both in terms of
award and legal costs. However, it is a fact that 75% of LOF cases are settled and do
not go to arbitration whereby keeping legal costs low(TSAVLIRIS, 2013).
As stated above by the ICS, revenues from LOF and SCOPIC have increased
substantially for the ISU. Mr. Tsavliris denies this specific statement. Lloyds own
40

data on LOF awards from 2000 shows that LOF revenue has significantly decreased
(TSAVLIRIS, 2013).

Amounts awarded. Source: Lloyds, 2013
Seeing that the revenues have decreased, along with the significant decrease in LOF
cases, the author realizes that there should have been a new way for salvors to retain,
if not increase their, revenues. Both sides have numerous of times stated that strong
and updated salvage industry is what they are seeking for. But on the other hand,
numbers show that LOF cases and revenues do not seem to follow this perspective.
The Union has also settled three basic principles which command changes. Unlike in
the past, environment is now relevant in every salvage case and an enormous
regulatory control by the involved coastal state on salvage operations. Quite often,
local officers are being given the power to determine precisely what work is done.
Back then, the main concern was oil cargoes. Nowdays, other pollutants can be
regarded as more damaging. Almost every ship is carrying pollutants (bunkers,
cargoes) and therefore, hardly is there a casualty in which environmental
considerations are not relevant. Public environmental concerns dictate the way in
which salvage operations should be carried out and have to be the first consideration
of every salvor.
Governments, on their side, are legislating by imposing potential criminal liabilities on
a salvor, and not only to increase potential civil rights. Salvors have accepted their
liability for negligence during a salvage operation, but before 2001 they had the so
called responder immunity. The Bunker Convention 2001 removed this immunity,
41

opening up the salvors to third party claims. Despite the good defence that exists, it is
likely that the salvors will be drawn into expensive, time-consuming ligitation subject to
the vagaries of a variety of jurisdictions. Nevertheless, the IMO recommended to
Member States that they should make provisions for responder immunity. It remains
to see how many States will accept this recommendation made by the IMO. The
potential criminal and civil liabilities of a salvor are very different than those in the
1980, when the Salvage Convention was being developed. Moreover, they are a
definite disincentive to the salvor to involve in other peoples problems (MARINE-
SALVAGE, 2013). By risking, the salvors are hopefully searching for a proper and
better reward.
To continue, in many shipping casualties where a coastal state is involved it is
frequently required that the bunker fuel is removed by the salvor, before they are
allowed to operate. This requirement arises even in cases when salvors feel it is an
unnecessary precaution. These concerns are well illustrated by the Prestige case.
Refusal to the Prestige for a port of refuge may have been understandable to the
authorities back then, but it is commonly accepted that if the port of refuge had been
given, the ship and much of her cargo could have been salved. Consequently, the
environmental disaster would be reduced. It is accepted that the award for the salvors
would have been around $10 to $12 million, the award would have been paid out of
the salved property fund, without intervention of SCOPIC, the remaining cargo oil on
board would have been contained and finally, the cleaning up of the spill cost, would
have been in the region of $40 to $50 million.
As the salvors could not operate, because the ship was not given a place of refuge,
she finally sank. The environmental damage caused is estimated in around $1 billion.
Had the ship and cargo been salved, claims of $1 billion would have been avoided. An
enhanced award would have been given to the salvors, yet very little to the benefit
conferred. The Prestige lost approximately 70,000 tons of oil, the Erika almost the
same amount and the Exxon Valdez lost some 37,000 tons. Claims of about $5
billion were made by these incidents. In contrast, during the 2009, ISU members
salved 1,022,730 tons of pollutants and to take things even earlier, in the last 15 years
they have salved almost 16 tons of pollutants, many of which could have ended up in
the sea and coastlines. If a SCOPIC clause is used, due to the ship and cargos little
value, its tariff basis does not have a reward mechanism for the salvors work to
prevent damage to the environment. A change in the law to provide the possibility of
42

a reward for protecting the environment would provide additional encouragement for
the salvor (MARINE-SALVAGE, 2013).
Lastly, salvors efforts in environmental protection are currently taken into
consideration, to a certain degree, as those efforts are one of the criteria taken into
account when assessing an award under Article 13. But, the reward under Article 13
is paid wholly by the ship and cargo insurers and their respective underwriters pro rata
to value and there isnt any contribution from the shipowners liability underwriters who
would normally bear the cost of pollution claims and therefore are a direct benefit from
the work carried out by a salvor. It is easy for someone to understand, that this is far
from unjust. As highlighted by Mr. Andreas Tsavliris in his interview to the author: The
advantages of clearly identifying environmental services within a salvage contract are
as follows:

It will identify to property underwriters the amount of an Article 13 award that
they currently pay and which should be attributable to liability underwriters
It will demonstrate the growing importance and value of environmental
services within an Article 13 award
It will clearly identify the returns to the salvage business on its investment in
environmental services (equipment and personnel) and ensure that future investment
is appropriately targeted(TSAVLIRIS, 2013).





Chapter Seven
CONCLUSION
43

After presenting, analysing and finally, evaluating the thesis taken by the ISU and the
CMI-ICS-P&I Clubs, the author has clearly made it clear, why should the 1989
Salvage Convention be amended. Arguments set by the Salvage Union based on
data, examples and critical evaluation seem to be much stronger than those set by the
opposite side. Salvors seem not to be properly awarded under the present scheme,
as environmental concerns have risen over the past years. SCOPIC works well, but it
is a tariff rate. Money spent on claims, could have been prevented, like the Prestige
case, if salvors had an environmental award.
The ISU believes that its case for change mentioned above, is persuasive and fair
given the way concern for the environment has rightly increased. The salvage industry
faces numerous challenges in a shipping world that has changed significantly.
Commercial pressures increase and society requires good environmental outcomes.
Yet the current regime does not fairly reward salvors for their operations. There is also
increased involvement and demands from shore-based authorities and incidents are
played out in the risk that a salvor may be regarded to be a criminal if pollution
happens during the operation. By adding the large cruise ships and container ships
and bulkers, it is easy to understand what the salvage industry has to think of.
According to the author, salvors are not seeking any environmental award unless a
benefit has been conferred and it should be in proportion to that benefit. Salvors are
problem solvers and are not likely to hide from a challenge. The Union requests that
the assessment to this award will be made by the appropriate tribunal, guided by
principles that have worked well for years.
The next step is the ratification of the proposed arguments stressed by the ISU, which
are likely to lead to a safer, modern, fair and well-structured shipping industry.







44





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APPENDIX