Marine Link
Sunday, January 21, 2018

1989 Salvage Convention To Enter Into Force

The International Convention on Salvage — which was adopted in April 1989 at a conference convened by the International Maritime Organization (IMO), the United Nations agency concerned with maritime safety and the prevention of marine pollution from ships — was scheduled to enter into force on July 14. It replaces a Convention on the Law of Salvage adopted in Brussels in 1910.

The 1910 Convention incorporates the "no cure, no pay" principal, under which a salvor is only rewarded for his or her services if operations are successful.

Although this basic philosophy has worked well in most cases, it does not take pollution into account. A salvor who prevents a major pollution incident but does not manage to save the ship or the cargo receives nothing. There is therefore little incentive for a salvor to undertake an operation which has only a slim chance of success. The new Convention seeks to remedy this deficiency by making a provision for an enhanced salvage award, taking into account the skill and efforts of salvors in preventing or minimizing damage to the environment. It further introduces a "special compensation" to be paid to salvors who have failed to earn a reward in the normal way.

Damage to the environment is defined as "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." The compensation will consist of the salvor's expenses, plus up to 30 percent of these expenses if, due to the efforts of salvor, environmental damage has been minimized or prevented. The salvor's expenses are defined as "out-ofpocket expenses reasonably incurred by the salvor in the salvage operation and a fair rate for equipment and personnel actually reasonably used." The tribunal or arbitrator assessing the reward may increase the amount of compensation to a maximum of 100 percent of the salvor's expenses, "if it deems it fair and just to do so." On the contrary, if the salvor is negligent and has consequently failed to prevent or minimize environmental damage, special compensation may be denied or reduced. Payment of the reward is to be made by the vessel and other property interests in proportion to their respective salved values.

The countries which have accepted the Convention are Canada, China, Denmark, Egypt, Greece, India, Iran, Italy, Jordan, the Marshall Islands, Mexico, Nigeria, Oman, Saudi Arabia, Sweden, Switzerland, United Arab Emirates, the U.K. and the U.S.

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