The principal of Piraeus based salvage operators Tsavliris has called on liability and property insurers as well as governments to adopt the concept of ''liability salvage'', in which salvors are remunerated for preventing a liability from materialising.
Recent developments in law and practice reward salvors (invariably on a cost plus basis) for preventing and/or combating marine casualty related pollution.
Nicholas Tsavliris is among a number of professional salvors who would like to take the enlightenment further, maintaining that the liability salvage concept is both logical and equitable and should be adopted. They submit that in much the same way as they are paid for saving property, they should be paid for preventing a liability or averting a loss, all the more so in relation to 'environmental salvage' where the environment itself is saved from damage. This may occur, for example, where a successful salvage service, preventing a casualty from being wrecked or causing massive pollution, averts significant pollution cleanup expenses and fines, averts expensive wreck removal or cargo disposal costs, averts substantial pollution damages/ claims, averts enormous (incalculable) environmental damage, etc.
One of the difficulties in accommodating such a regime is determining who will pay. It is Tsavliris' view that ships' liability insurers (namely the Protection & Indemnity Associations) can be designated 'primary paying parties' since they stand to benefit most from removal of the risk by the salvors. Indeed all the liabilities contingent upon a casualty (as set out above) are risks covered by the P&I insurers.
Furthermore, a new international purpose fund could be created or changes could be made to existing applicable international conventions (i.e. 'Civil Liability' and 'Fund Conventions') enabling the 'Funds' to cover liabilities/ eventualities.
Strict liability coupled with mandatory liability insurance would reinforce the regime. This would produce much needed funds to an otherwise dwindling industry, which undoubtedly offers very valuable services to the maritime community.
The entire professional salvage industry performs about 100 salvage (LOF) contracts annually averaging some $1m in value. In doing so they salve billions of dollars worth of property and they avert billions of dollars of claims arising. For preventing immeasurable environmental pollution liabilities and saving lives, they earn approximately $100m gross, out of which they must finance the maintenance of their salvage capability. From limited income they are expected to repay bank loans and shareholders dividends, otherwise they will fade away. They can also end up in jail under the new 'seafarers criminalisation' regime.
Tsavliris says that at the end of the day it is a matter of good public policy. Does the maritime community want a healthy salvage industry, capable of dealing with large, complicated, dangerous casualty situations or not?
He concludes, 'Do we want a competent salvage contractor to be there, when calamity strikes, to intervene and prevent a multi-billion dollar mess?'
MJ Information No: 22607
