INTERNATIONAL SALVAGE UNION
December 2020
Wreck Removal – work starts on new contracts and code of practice Wreck removal operations, the contracts used and the way in which tendering for jobs is conducted are some of the key issues for the salvage industry. And ISU is working with BIMCO and other parties to revise its popular and well-regarded wreck removal contracts. At the same time, ISU is also working with the International Group of P&I Clubs to revise the wreck removal tendering code of practice that was agreed in 1998 and has not been updated. ISU President, Richard Janssen of Smit Salvage, is chairing the BIMCO group considering the wreck contracts. He is supported by ISU vice President, Nick Sloane, as well as Executive Committee members, Leendert Muller and John Witte, both past Presidents of ISU. The International Group of P&I Clubs are central to the process and Tony Goldsmith of Hill Dickinson and Andrew Chamberlain of HFW are jointly providing independent legal advice to the review committee. The strength of the ISU presence reflects the importance of these contracts which are used for both traditional “wet” wreck removals and also sometimes for other salvage work. Wreck removal work accounts for some 50% of the ISU members’ annual gross revenues and income from these projects helps to support their vital emergency response activities.
of well-managed, successful operations provide more certainty and, when performance is under government and media scrutiny an efficient, clean and safe job is essential. Transparency and realistic pricing is also essential to ensure a range of contractors are able to compete fairly for work internationally and in all territories.” Speaking at the recent virtual Salvage and Wreck Conference, Sam Kendall-Marsden of the Standard Club agreed that “price isn’t everything” and he said: “Salvors ought to be remunerated appropriately to support a viable, healthy salvage industry for the benefit of the broader shipping industry.” But, he added: “It is also worth noting that recent years have seen an increase in the cost of wreck removal which has had an impact on P&I Clubs’ finances. The shipping industry is looking at ways to make the process more cost effective.” Mr Kendall-Marsden said that he shared Mr Janssen’s view that the work should be “collaborative” and that he hoped “the spirit of cooperation will prevail.” At the same conference, ISU Secretary General, Roger Evans, set out the ISU’s concern that Quantitative Risk Assessment should not be used to effect risk transfer and that full risk transfer
Speaking about the discussions, Richard Janssen said: “Transparent tender processes and contractor selection, the use of Quantitative Risk Assessment and the fair apportionment of risk are the key matters. I am sure that the spirit of cooperation will prevail as insurers and salvors both serve the shipowner and must work in their interests. “Assessing the exposure from different angles to then jointly develop the optimum solution sounds like a logical way forward but is not often recognised as such. As a number of cases have already demonstrated, price is not everything. “Contractors with a proven track record 1
should not be the default position at the outset of contractual discussions. ISU vice president, Resolve Marine’s Nick Sloane, salvage master for the removal of the wrecked COSTA CONCORDIA, emphasised the need for “fairness” and the importance to would-be contractors of the “feel” of an operation on which they would base their risk assessment. “We don’t mind taking risk, but it should be fair,” he said. ISU is also working with the International Group of P&I Clubs to revise the wreck removal contract tendering code of practice that was agreed between them in 1998 and has not been updated. Since then, environmental concerns have become more important, the requirements of the authorities have become more demanding and the size of vessels has increased significantly creating a very different context for wreck removal tendering. ISU is concerned that confidentiality, fairness and transparency of the process should be central to the way the contractor is selected. And, for contractors, the cost of participating in tenders – which can be a six figure sum – is also an issue.
Scaldis' heavy lift vessel, RAMBIZ, in action raising the wreck of the FLINTERSTAR.