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Salvage: Making a Bad Situation Worse

global salvage

By Joseph Collum 2016-01-08 18:15:36

(Article originally published in Sept/Oct 2015 edition.)

As if ever-bigger ships weren’t enough of a challenge, salvors these days must contend with political interference, misguided legislation, and the threat of lawsuits and even jail time.

The 21st Century is the age of mega ships – from containers and tankers to ro-ros and cruise liners. As vessels grow ever larger, so too have the stakes when something goes awry and the challenges to salvors who come rushing to the rescue, trying to prevent bad situations from exploding into full-blown disasters. Yet those Good Samaritans are being confronted by hurdles that can not only thwart their salvage efforts but the salvors themselves.

Official Meddling

The impediments are often the very government officials who summon them in the first place.

“The technical requirements of any major salvage operation are not fully understood by governments and official bodies in charge of making the decisions,” says Toby Ingram, Singapore spokesman for the LOC Group (London Offshore Consultants). “The quickest solution to removing or securing a wreck is not always the most effective or desirous. Governments tend to take the knee-jerk approach of ‘Get it done fast. We are under public pressure. Hang the cost or anything else. Just make it go away!’”

T&T Salvage Vice President Jim Elliott concurs: “Those with little to no experience often delay needed actions, ultimately causing more harm than good.” Elliott points to the U.S., where marine casualty response operations are managed by what is known as a Unified Command comprised of federal, state and local authorities, some of whom have little expertise in salvage and may never have managed a marine response operation.

“Historically, the U.S. government’s first call during a marine casualty was to an oil spill response organization rather than a salvage team,” Elliott says. “Unfortunately, an oil spill response organization cannot salvage a vessel, and once oil is in the water it is a losing game as oil spill recovery effectiveness, even with the latest technology, remains at only 10 to 25 percent.”

Perhaps the most glaring example of the government’s bungling a salvage attempt is the case of the oil tanker Sea Empress, which ran aground in 1996 in one of the most environmentally sensitive estuaries in the U.K. Due to a series of decisions by the Coast Guard Agency, the local marine pollution control unit and the local port authority, more than 70,000 tons of oil were spilled, one of the worst environmental calamities in U.K. history.

The SOSREP Solution

The disaster, however, led to the creation of the post of SOSREP, the Secretary of State’s Representative, who possesses almost dictatorial powers in the event of a maritime emergency. SOSREP has the authority to make all decisions relating to intervention and/or salvage operations.

“The SOSREP system helps avoid situations in which persons or bodies, including local authorities and pressure groups, can frustrate, obstruct or delay effective action,” current SOSREP Hugh Shaw explained in Singapore last April at the Asian Marine Casualty Forum. “Ministers do not intervene in the SOSREP’s operational decision-making. Whilst operations are in progress they must either back him or sack him.”

The U.K. remains one of the only coastal states in the world to establish such a powerful post. And the decision proved a wise one in January 2007 when the 53,409-ton container ship MSC Napoli suffered a cracked hull in the English Channel during a severe winter storm that whipped up huge waves. Despite the protestations of environmentalists and local political leaders fearing a cataclysmic oil spill, Captain Robin Middleton, the U.K.’s first SOSREP, boldly ordered the Napoli deliberately beached so it could be salvaged. He chose Lyme Bay in Devon, an ecologically sensitive area and popular coastal tourist destination.

“We told (Middleton), ‘Nowhere in Lyme Bay,’” one activist told The Sunday Times. “It’s too important.” Middleton, however, unilaterally decided beaching was the safest response to prevent the Napoli from breaking up and spreading oil over a much wider area. Fortunately, his decision – in the face of withering criticism – proved to be correct. It resulted in minimal damage to the environment, and Middleton was lauded by the International Chamber of Shipping for his resolute action.

Salvors lament the absence of an all-powerful maritime decision-maker like SOSREP in all coastal states. “You can imagine a system where politicians make decisions like that,” says James Herbert of the London-based International Salvage Union. “There is no way they would allow a vessel to be beached on a tourist coastline.”

That is what happened off the coast of Galicia in northwest Spain when the oil tanker Prestige began sinking in November 2002. Carrying 77,000 metric tons of heavy fuel oil, the captain attempted to sail into safe harbor. Fearing a massive oil spill on their shores, Spanish authorities turned away the stricken ship and forced it back out into the Atlantic in heavy seas. The governments of France and Portugal did the same.

With no port of refuge, the storm finally took its toll and the Prestige sank, releasing more than 20 million gallons of oil into the sea and befouling a much larger stretch of seabed and coastline than would have been polluted had the ship been granted safe haven and salvaged. The World Wildlife Fund compared the fiasco to the Exxon Valdez disaster.

“It’s easy to envision a Prestige scenario off the U.S. coast,” T&T Salvage’s Elliott says. “In the U.S., as in other countries, response operations are often an exercise in civil society where political, media and stakeholder issues drive decision-making as opposed to a pragmatic cost-benefit analysis or the technical issues at hand. The issues are complex and, unfortunately, exercises are typically played out in a vacuum without the benefit of political leaders who will ultimately make the final decisions.”

The “Iceberg of Criminalization”

Perhaps the single most important issue to salvors worldwide, however, is the “growing iceberg of criminalization,” as Anders Arfelt of the Baltic International Maritime Council (BIMCO) once called it. When a rescue operation goes wrong, salvors can be prosecuted as criminals and sent to prison.

The most dramatic example of that was the arrest of Nicolas Pappas, who was summoned to salvage the tanker Tasman Spirit when it ran aground in Karachi’s Keymari Channel in July 2003, spilling much of its 67,532 tons of crude oil. Pappas was arrested by Pakistani officials, along with seven crewmembers of the Tasman Spirit, despite not arriving on the scene until four weeks after the grounding and despite recovering 40,000 tons of oil. Pappas spent nine months in a Pakistani prison before being released.

The International Salvage Union has called criminalization of salvors a “blunt instrument” some governments use against the very people best positioned to prevent pollution during a maritime casualty. “Criminalization feeds a blame culture more interested in scapegoats than prevention,” then-ISU President Hans van Rooij lamented. “Governments may well pay a stern price for fueling the process of criminalization and so creating a climate of fear.”

Need for Immunity

Salvor peril can extend to civil liability as well. In the aftermath of the 1989 Exxon Valdez debacle in Alaska, Congress passed the Oil Pollution Act of 1990. Among its provisions was the extension of immunity to responders, including salvage operators, who are called upon to mitigate the damages from an oil spill. OPA 90 contained a “polluter pays” provision, which specified that liability for costs and damages would fall on the “responsible party” for the spill (the ship’s owner, captain, etc.).

Then came the Deepwater Horizon disaster, when an oil rig exploded and spewed millions of gallons of oil into the Gulf of Mexico. Emergency response vessels, including salvors, rushed to the scene to help save lives and stanch the free flow of petroleum into the gulf. “Notwithstanding their valiant efforts to help in the worst environmental disaster in U.S. history,” says admiralty attorney Jonathan Waldron of the American Salvage Association and Blank Rome LLP, “these emergency and cleanup responders were sued, and the responders are still entwined in this complex and protracted litigation.”

One of the allegations in the lawsuit is that responders used a controversial chemical dispersant that was approved by U.S. officials to help scatter and dissolve the spilled oil. One company, National Response Corporation (NRC), was accused of using the dispersants in amounts beyond the scope of the government’s instructions.

Despite OPA 90’s responder immunity clause, judges refused to dismiss the cases, leaving salvors and other responders with huge legal fees to defend themselves. NRC got hit with a double whammy when its insurance carrier refused to renew its policy, only to eventually agree to only $500,000 in coverage – at an astronomical premium of $100,000. 

The American Salvage Association has been pressing Congress – so far without success – to fill the gaps in OPA 90 and extend immunity to salvors and other responders in all cases that don’t involve gross negligence. “The reason this issue remains so important to our industry,” says Waldron, “is that our country remains at risk that responders may decide not to respond as quickly or aggressively as they might otherwise had Congress taken action to address the gaps in the current responder immunity.” – MarEx

DuPont-Columbia Award winner Joe Collum lives in Florida.

 

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.