Statute or legislation has always been necessary to ensure the protection of the

environment in the context of salvage operations. Discuss.

Salvage, a unique concept in maritime law and practice, the rescue of a ship
or its cargo on navigable waters from a peril that, except for the rescuers assistance,
would have led to the loss or destruction of the property. It can be traced back to
Roman times, the modern international law of salvage is largely based on convention
law and heavily influenced by English admiralty decisions developed over the last
few centuries. The Salvage operations are carried out in virtually all the seas of the
world. There are several courts and arbitration systems available to determine the
quantum of a salvage award. For example, Japan, Russia, China and Turkey have
their own standard contracts of salvage that are used sometimes. If a person
voluntarily saves the property of another on land, English law entitles them to no
reward for their efforts. However, if the same service is performed at sea, the person
saving the property, the salvor, will be entitled to a reward, not exceeding the value
of the property saved. It is not merely to compensate the salvor for the benefit he has
conferred to the salved property. It also provides a positive seafarers to take the risk
for the purpose of the assisting others in danger.
In the context of worldwide economics, since second half of the previous
century, oil has played an extremely important role in the development and
prosperity of many countries over the world particularly in developed countries in
which the vast amount of energy has been consumed every year. In order to keep
abreast to the increased oil supply, the water transportation has represented
remarkable changes in the development of shipping operation with the significant
increase in the transport capacity. However, the increase in the carriage of oil in the
sixties brought a new problem, Oil pollution. Casualties such as the Atlantic
Empress, The Christos Bitos and the Amoco Cadiz, resulted in governments, fearing
pollution, refusing casualties a place of refuge for salvage work to be completed.
With out a place of refuge, salvors had no alternative but to tow such ships far into
the oceans to be sunk. As they were rewarded on a no cure basis they failed to
collect a salvage award or even recover their expenses. They were in effect being
discouraged to assist the very ships the world wanted them to salve.
In an attempt to overcome this problem, Lloyds Of Form (LOF)1980
introduced the twin concepts of the enhanced award and the safety net. Both
concepts apply only to the salvage, or attempted salvage, of oil tankers, laden wholly
or in part with a cargo of oil. Later, the Salvage Convention 1989 made several
changes to the law which was relevant to the environment. Unlike LOF 1980
precursors, these provisions are not limited to laden tankers. Article 13.1 (b) add to
the nine criteria for assessing a salvage award, an additional factor - "the skill and
effort of the salvor in preventing or minimising damage to the environment". Damage
to the environment is defined by Article 1(d) 1989 Convention that as, a 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. This is
considered as one of significant changes in the nature of Salvage in respect of
protecting the environment caused by oil pollution from ship compared to the
traditional Salvage. The 1989 Salvage Convention encourages the salvors not only
focus on owners property but also give an incentive for salvors to protect the marine
environment.
For the purpose of Convention, damage to environment must be a physical
character. In practice there have been pollution cases in which the majority of claims
for compensation have been for economic losses such as those suffered in the
fishing and tourist industries. Such losses could not constitute damage for the
purposes of Article 1(d), although in practice it would be rare for substantial
economic losses to be sustained in the absence of the substantial pollution
environment. The requirement of physical damage would also presumably eliminate
cases where the only environment harm alleged involves loss of visual amenity, for
example, due to the presence of substantial unsightly wreck in an area of natural
beauty. The provision of the Convention relating to damage to the environment could
not therefore be invoked in a case which in substances is merely one of the wreck
removal. It is clear that physical damage embraced by Article 1(d) is not confined to
that caused by pollution or contamination, but may extend to that caused by fire or
explosion. Whilst the definition would cover damage to human health as a result of
such events, it would not appear to cover physical damage to shoreside property of
the kind which has been caused in some cases by explosion or fires on board ships
in or close to port.
Besides, the change of Salvage regime under the influence of oil pollution
from ships is also recognised by imposing Article 8 which follow the principle set out
in The Tojo Maru,that, the due care of salvor, owner, and master of the ship to
prevent or minimize damage to the environment. This is owed only to the owners of
the vessel or other property in danger, and consequently a breach of that duty will
not entitle third parties to sue the salvor for negligent failure to prevent or minimise
damage if they can be established outside the convention in national courts, in
certain cases they are excluded by international conventions governing
compensation for pollution from ships or for other damaged sustained in connection
with the carriage by sea of hazardous and noxious substance. It is only performing
the salvage operations that the salvor is under and duty of care prevent or minimize
pollution. Whilst this duty may therefore affect the manner in which he carries out
any act or activity undertaken to assist a vessel or any property in danger, it does not
impose on him any obligation to engage in preventive or clean up measures
unconnected with such assistance.
This duty is implied in all categories of contract in order to avoid the
divergence in refuse or accept further cooperation from the other salvors because
this may partly reduce the reward of salvors by sharing award. Furthermore, there is
also the co-operation from public authorities to increase the effectiveness of reducing
or minimizing the damage resulted from oil pollution from ship. The 1989 Salvage
Convention also shows the attention of Salvage authorities on damages caused by
oil pollution from ship by providing criteria to evaluate reward through the skill or
efforts of the salvors in preventing or minimizing damage to the environment. This
principle absolutely differs from the oil principle of no cure no pay. It means the
reward could be acquired if the salvors perform proper skill or efforts to protect the
environment.
 Regarding to the reward for salvors, the 1989 Salvage Convention, Article 14
also offers further incentive by special compensation to protect the environment
which was to designed to ameliorate the harshness of the traditional No Cure No
Pay rule by providing a salvor would at least recover his expenses whenever there
was a threat of damage to the environment. A safety net. Article 14(1) gives a salvor
special compensation, based on the salvors expenses as defined in Art 14(3), if it
has failed to earn an award under Art 13 at least equivalent to such special
compensation. This shortfall between any award and the expenses-based special
compensation is to fall entirely on shipowners. Their liability insurers, the P&I Clubs,
are thereby made directly concerned with any salvage award involving
environmental considerations.
Special compensation is available if the salvor has carried out salvage
operations in respect of a vessel which by itself or its cargo threatened damage to
the environment . . .. Article 14(1) will entitle the salvor to special compensation,
even if the salvage operation fails to prevent or minimise damage to the
environment, but this will be limited to its expenses as defined in Art 14(3). If,
however, the salvor does manage to prevent or minimise damage to the
environment, Art 14(2) gives the tribunal power to increase the special
compensation payable by up to a maximum of 30 per cent of the salvors expenses.
However, if the tribunal considers it fair and just to do so, it may make a further
increase up to a total increase of 100 per cent of the salvors expenses. Article 14(3)
defines the salvors expenses for the purposes of Art 14(1) and (2)as:
. . . out of pocket expenses reasonably incurred by the salvor in the salvage
operation and a fair rate for equipment and personnel actually and reasonably used
in the salvage operation taking into consideration the criteria listed in Art 13(h), (i)
and (j).
These provisions were considered by HL in The Nagasaki Spirit. Services
were rendered under LOF 1990, which incorporated Arts 13 and 14, to a tanker on
fire after a collision in the Malacca Strait. The main question at issue was how a fair
rate for tugs used should be calculated. Their Lordships endorsed the judgment of
the Court of Appeal that the assessment should cover the overhead costs of the
salvors in maintaining salvage craft in readiness. However, it should not include any
profit element, as the tribunal has an opportunity to award this under the mark-up
provisions of Art 14(2) if the operations successfully prevent or minimise damage to
the environment. Their Lordships also held that Art 14 expenses are not limited to
those incurred in attempts to minimise pollution, but cover all of the expenses
incurred in the salvage operation. The decision has been bitterly criticised by the
salvage industry as providing an inadequate recompense for the costs of maintaining
salvage tugs in readiness during a period of general decline in demand for their
services.

Therefore, Article 14(4) provides that special compensation under Art 14 shall
be paid only if and to the extent that such compensation is greater than any reward
recoverable by the salvor under Art 13. Accordingly, the tribunal must first fix both a
salvage award under Art 13 and the amount of special compensation under Art 14.
The latter amount starts with an assessment of the amount of the salvors expenses
under Art 14(3), to which a mark-up is applied under Art 14(2) if the salvor has
successfully minimised or prevented damage to the environment. Strictly speaking,
the award under Art 13 must be assessed separately from the amount of any special
compensation payable under Art 14. However, some crosschecking is permissible,
and indeed inevitable, given that the assessment of Art 14 compensation will involve
the consideration of factors that are also relevant to the assessment of the award
under Art 13. The tribunal, in making this initial dual assessment, is also to be guided
by the Common Understanding to the 1989 Salvage Convention.
The severe devastation for human life and marine environment caused by the
oil pollution from ship since the second half of the twenty century has required
considerable reform in the Salvage legal system including its nature as well as the
emphasis of salvage agreement. The imposing duty of protecting the environment on
the salvor as well as offering extra compensation for his action while carrying out the
salvage operation might be two significant change of salvage legal system. The
benefit conferred by adopting new salvage law could arguably reduce the loss or
damage to environment.