The annual Salvage and Wreck Removal Conference has taken place with salvage, insurance and legal communities reported to be ‘focused together on this important industry’.
The conference, organised by Informa PLC and supported by the International Salvage Union (ISU) is traditionally held in London but due to the Covid-19 situation was on this occasion held virtually with speakers and panel sessions available live also recorded for later viewing. Participants were also able to connect with each other through their own systems.
The salvage industry has in the past emphasized the principle, use it or lose it and in his opening address, ISU president Richard Janssen referred to earlier conferences where panel discussions were held on the subject of capacity stating: ‘… it is now an open question whether the capacity of the industry is satisfactory and whether its capability is aligned with the risks run by underwriters.’ Talking of times gone by, he added: ‘We need to recognise that there is no place for romantic or heroic stories about how things used to be, nor for old fashioned prejudice and characterisation of salvage professionals. Only through continued dialogue about today’s and tomorrow’s challenges and the basis on which salvage services are being remunerated can we ensure - as underwriters and salvors – that we continue to serve our mutual principal, the shipowner.’
Referring to low levels of LOF cases and revenue Mr Janssen stated: ‘It is interesting to see the clubs also recognising the value of LOF, facilitating as it does, rapid intervention which can prevent a casualty from becoming a costly disaster.’ He concluded that it is not difficult to make a strong case for the professional marine salvor operating with their own equipment and focussed on reducing business interruption of a shipowner and limiting their exposures and that of their underwriters.
This theme was explored by Lloyd’s Appeal Arbitrator, Jeremy Russell QC describing the assessment of salvage awards as an ‘art not a science’ where awards should strike a balance between competing interests and be fair remembering that Article 13 of the Salvage Convention requires that rewards should be fixed with a view to encouraging salvage operations. Mr Russell stated that if there were concerns that awards were too generous, it should be remembered that only through generous awards could salvors hope to recoup losses for abortive sorties, cases where there was no pay and no reward and cases where the salvor was unable to obtain security.
Rahul Khanna of Allianz provided a round-up of casualty statistics reporting that the 41 total losses in 2019 was a record low with South China, Indonesia and the Philippines the worst regions for total losses but the British Isles, North Sea, English Channel and Bay of Biscay becoming worst regions for casualties with 605 incidents. Car carriers, roro vessels and containership fires are the major concern.
The demise of Ardent in 2020 took many by surprise and the topic was considered by a conference panel with Mr Janssen commenting: ‘the market is always right and salvors need to adapt’. Speaking as president of the American Salvage Association, Resolve Marine’s Lindsay Malen Habib said that the stringent equipment and speed-of-reaction requirements of the US salvage and marine firefighting requirements of OPA 90 meant providers needed to invest in assets but that previously pricing for providing these services was unsustainable. She suggested it was unlikely that there would be new major players entering the US Market.
Piraeus-based Tsavliris Salvage is one of the best known global marine emergency response contracting companies, a particularly frequent user of LOF contracts. Its activities are recounted regularly in MJ and ISU reports that George Tsavliris gave a passionate speech about the industry in which he has more than 50 years’ experience and the importance of moving forwards and remaining optimistic.
Ben Harris, claims director for Shipowners P&I Club summed up saying: ‘In emergency response, insurers wanted a viable industry ready to respond without delay; salvage capacity with resilience and investment and training.’ He stated that in wreck removal insurers want a competitive market and an appetite for commercial risk adding that Clubs want to be more involved at the front of the process stating: ‘We want to make sure there is response when required.’
By Peter Barker
