Salvage and the environment

In modern times the law of salvage has changed to reflect the growth in importance of salvage services in not only saving property but also protecting the environment.

This wider role, apparent since the first major tanker accidents, is now a feature of most maritime casualties, with priority commonly being given to removal of bunker fuel.

There has been perennial debate as to how this additional modern facet of salvage should be reflected in the salvor’s remuneration or reward.

An early proposal was to assess the potential pollution which the salvor prevented, and for the shipowner to pay an award reflecting “liability salvage”.  However this approach involved many uncertainties and proved controversial.

A compromise solution was adopted in a revision of Lloyd’s Open Form of Salvage Agreement which provided for payment of expenses plus a percentage increment.  A similar approach was taken in the 1989 International Salvage Convention: this provided for payment of “special compensation”, consisting of the salvor’s expenses plus an increment reflecting the degree of success in avoiding pollution.

In practice the Convention led to many disputes which were typically complex and expensive to resolve.

To avoid these problems the insurance and salvage industries adopted in 1999 the Special Compensation P&I Clause (SCOPIC), which provided for detailed tariff rates, whilst addressing various other issues including rights of termination.

A detailed commentary on SCOPIC, and on cases illustrating its operation in practice, is given in Chapter 14 of Shipping and the Environment, ‘Salvors’.