Executive Vice President, Donjon Marine Co., Inc.
Tell us briefly about the International Salvage Union.
The International Salvage Union (ISU) is the global trade association representing marine salvors. Its members provide essential services to the world’s maritime and insurance communities. Members are engaged in marine casualty response, pollution defense, wreck removal, cargo recovery, towage and related activities. The membership of the ISU includes approximately 60 members and over 60 associate members, which represents the majority of the worldwide salvage capability. For the most part, if it’s newsworthy and salvage related, the odds are that an ISU member is involved.
You currently serve as Vice President of the International Salvage Union. Formerly, you served as President of the American Salvage Association. Describe where the missions of these two organizations meet, and where they differ.
The Focus of the ASA has always been more regional than the ISU. The ASA was started over 10 years ago in an effort to provide the North American Salvage Community a voice in the structure and practical application of the requirements for Salvors as a result of the Oil Pollution Act of 1990 (OPA-90) for Salvage and related services. Now that the OPA-90 era is in full force and effect, the ASA’s concentration, while still maintaining an oversight position as relates to the continuing evolution of OPA-90, has shifted to more immediate concerns of the marine salvage community. These include Ports of refuge, Salvor Indemnification and continuing education and training for present regulators and future marine salvors; to name just a few. The mission of the ISU is based upon more traditional salvage issues and concerns such as the growth and use of the Lloyds Open Form (LOF) Salvage Agreement, SCOPIC, and issues that are based upon the needs of the worldwide salvage community rather than the more narrow scope of the ASA. It also provides a single unified voice when dealing with the international shipping industry, particularly shipowners and insurers. This is not to suggest that there is not overlap between the ISU & ASA. At present, there are nine ASA General Members who also are full Members of the ISU. While the geographical areas of concern are different, the ASA, ISU and their respective memberships are both concerned about the future of Marine Salvage and how their membership can be most effective in a world where regulatory requirements, concerns and focus change on a regular basis.
What’s the number one hot button issue on the minds of ISU members in 2014? Is it the same for ASA? If not; why not?
There are many different issues that are of concern to the North American and International Salvage Communities. While I would be hesitant to rank them in order of importance, as they are all important concerns to the salvage and marine communities, there are two that both the ASA & ISU believe to be important and topical. These include ‘Places of Refuge’ and the monitoring of the ever changing regulatory landscape. While the latter issue encompasses a number of different legislative and administrative activities at any given time, the issue of Places of Refuge is probably the issue that should be the one that is of most concern for not only the salvor, but the vessel owner, underwriter and the residents and regulators who live and work in the area of the casualty. In the event of a casualty where weather and related conditions can negatively impact performance, the need to move the casualty to protected waters or an appropriate Port Facility often is the difference between success and failure. What we all must keep in mind that even if a vessel is lost offshore, in deep water, there still remains the serious risk of a negative environmental impact as the pollutants escape the vessel and rise to the surface, and may then spread over a wider area than might otherwise have been the case. Once sunk, the cost to recover and depose of the pollutants is at least ten times higher than if the pollutants were removed with the vessel still afloat. When it comes to the protection of the environment, the phrase “keep the oil in the ship” is, from my perspective, the most effective way to be environmentally conscious. When conditions require, the ability of a professional Salvor to be allowed to bring the vessel to a location where he/she can be most effective is the best way for both commercial as well as environmental success.
Tell our readers what ‘makes’ a Salvage Master. Is there a formal licensing / certification process to get to that point? If not, should there be one?
The question of what makes a Salvage Master is one that ten different “experts” will answer in ten different ways. While the ASA and ISU have both discussed ways to better formalize the training and intellectual requirements of what makes up a Salvage Master, the conclusion we have reached is that there is no practical way to quantify the specific requirements of a Salvage Master so that it can be condensed to the written word. I still am amazed at the ability of all successful Salvage Masters to know what is going to happen to a stricken vessel and proactively take steps to rectify the situation before it even occurs. This is not something that can be taught; but learned based upon the experience of being there. There is no way to teach the ability to work long hours, away from home, under extreme emotional and physical pressure. Over the course of my 35+ years of involvement with marine salvage, I have met and worked with salvage masters who have started their careers as lawyers, divers, vessel masters, vessel engineers, police officers, laborers and salesman. While training in a marine field certainly provides for a good base to move forward into the field of marine salvage and ultimately a salvage master, it is not a necessity. A Salvage Master requires common sense, a basic knowledge of the Engineering principals that govern a salvage effort, an ability to direct and motivate people and most importantly experience. No two marine salvage efforts are ever the same. Therefore, there is no such thing as a “textbook” response. Today’s modern salvage masters are part politician, part engineer, part field general, part equipment manager and part deckhand. Put all these abilities together over time and what comes out is a salvage master.
You’ve had a lot of high profile roles in the salvage community. Perhaps the most interesting was a seven-month tour of duty as the Civilian Project Manager for the Federal Salvage Response necessitated by Hurricanes Katrina/Rita in the U.S. Gulf in 2005. Tell us about that experience.
When Katrina hit the US Gulf, I like most of the US was glued to the news to see what happened. Initial reports were that like past hurricanes that have impacted the Gulf for the last 100 plus years, damage was done, but nothing that severe. Obviously that was not the case. I arrived in Louisiana about three days after Katrina hit. On day one, I boarded a helicopter and flew to New Orleans. From the air, things looked fairly normal until we reached the outskirts of New Orleans and I noticed a sea of blue which turned out to be Blue Canvas which was used by property owners to cover all of the roof damage the entire area sustained. Then, about 20 miles outside of New Orleans, I was hit with a smell that I will never forget. It was a combination of raw sewage, rotting garbage, putrid water and other things that are not worth detailing. I then reached New Orleans. As bad as the smell was, it could never prepare you for the sight of New Orleans, a city that I have visited and worked in for over 30 years, utterly destroyed. It was a sobering and thought provoking landscape. My next seven months was spent working shoulder to shoulder, 12 to 14 hours per day, every day of the week with a group of men and women that were pulled from all over the country to come together to respond to the worst natural disaster that this country have ever seen. Private contractors, lead by Donjon, joined forces with the U.S. Navy, U.S. Coast Guard, USACE, and hundreds of other local private responders and citizens to slowly bring New Orleans back to a functional City. There were certainly difficult times where the task seemed in surmountable. But, as we started to dig ourselves out of the quagmire that was New Orleans, we began to see an even increasing light at the end of the tunnel. By the time Donjon’s portion of the work was completed, after over 7 months of time onsite, while exhausted and ready to go home, I remember sitting in the conference room which was our office, home, social gathering place and overall refuge from the horrors of Katrina and thinking I really didn’t wait to go home. I believe someone called it a mild case of “Stockholm Syndrome.” While my overall experience was positive, I truly hope I am never needed to perform that duty again.
Places of Refuge: where are we in terms of regulatory bodies as to solving that sticky issue?
The issue of Places of Refuge is so very important to the safety of the Marine Community that we, who are part of the Marine Response Community, must find a way to find a common ground that will allow a stricken vessel access to an area where a vessel can safely be worked on. This being said, the decision to allow a potential disaster to enter into a Place of Refuge does present some risk to the individual or individual who approved this action. This basic problem will drive a negative response when presented with a request for refuge. One of the biggest impediments to implementing a worldwide policy as relates to ‘ports of refuge’ is a lack of knowledge of the risks to the environment when you don’t allow a casualty or refuge as compared to when you do. What we must keep in mind is that the risk to the vessel, salvage crew and environment is much less if a professional Salvor can demonstrate that a safe and more effective response can be performed in a safer environment which is protected as much as possible, from the elements. I believe that the best way to accomplish this is not only through legislation but also thru the efforts of organizations such as ISU and ASA, who through various committees and outreach programs, can educate regulators, stakeholders and coastal states as to the overall benefits to the environment. This will take time. We need agreement from coastal states that they will accept their obligations under existing conventions and guidelines. There is significant legislation that is in place internationally and regionally, in particular, IMO Resolution A.949, “Guidelines on Places of Refuge for ships in need of assistance;” the 1989 Salvage Convention and, in Europe, the EU Directive 2002/59/ EC. Coastal states should establish an authority to assess each case on its merits without political interference. They should engage people with the appropriate credentials and experience to undertake an assessment of a casualty requesting a Port of Refuge. Such assessment should include a visual inspection and conclude with recommendations for managing and mitigating the risk of any impact on local coastlines and communities. The assumption should be that a Place of Refuge will be granted if needed and that there should be “no rejection without inspection.” Wider adoption by coastal states of simple, robust, “single point” command and control models akin to that of the US Incident Commander or the UK’s Secretary of State’s Representative for Salvage (SOSREP) system would helpful.
Are we any closer to solving the issue of responder immunity for salvors?
I personally have a different view than most as relates to the issues of responder immunity. While I support the idea that the Salvage community needs stronger worldwide legislation that better defines what immunity is available to a salvor, I also believe that it is the Salvor’s obligation to make sure his/her operation does not result in something that requires responder immunity and to ensure that the contract that is reached contains language that indemnifies a salvor for any eventuality that occurs except in the case of gross negligence and willful misconduct. Salvors, like any other professional service provider, must have some responsibility for their actions. This is what separates the professionals from the part timers. If a salvor is indemnified for any and all actions, what separates a professional from a non-professional? Any contractor interested in taking a shot, will come in at an unrealistic price, possibly make the situation worse than it is and leave without risk or responsibility. This being said, as a result of OPA-90, the United States seems to be a region where Salvors are most concerned, not only to civil but potential criminal liabilities in the event of a real or even perceived “error.” Based upon this fear, the issues of appropriate responder immunity for Salvors is an important issue to all salvors, no matter where they work.
You are on record as saying that one of the primary focus areas for ISU members is the so-called Lloyds Open Form or LOF. If LOF is the most commonly used salvage contract and has been in use for over 100 years and the ISU supports its use, do others have issue with its use? What’s the alternative?
The LOF is clearly the easiest and fairest Salvage form available today. It is universally accepted by the world wide insurance communities and has been in existence for over 100 years. It is also a living document which can be modified as financial, operational and regulatory requirements change. Further, with the addition of the SCOPIC amendment, the LOF can be (and often) is used for non-traditional LOF cases where the value of the vessel and its cargo is not high enough to financially justify a response. The SCOPIC amendment to the LOF essentially provides for day rates and associated conditions which converts an LOF (which is success-based) to a time and material type agreement which compensates the contractor for use of their equipment and staff. Therefore, it is appropriate for any type of casualty response. Nevertheless, there are a number of ISU and ASA Salvors who have constructed their own type of in-house agreement. Both contain similar clauses and conditions. After 100 years of growth, rewriting and evaluation, the LOF remains the most effective Salvage Agreement in use today. As far as Donjon’s use of the LOF, it is our preference but if, for whatever reason, an owner refuses to accept it, we look to standardized agreements such as those offered by BIMCO which offers a similar history of success and ability to change as conditions warrant as the LOF. Simply put, we prefer the LOF, will push for its use, but will work with an agreeable BIMCO or in-house agreement.
How, if at all, has the relationship between salvors and the insurance community evolved over time? Are we in a better place now than, say, ten years ago? What’s changed, if so? And, what needs to evolve further?
Today, the relationship between the salvage and insurance communities is one of partners, rather than adversaries as was the case in years past. The reason for this is very simple. As a result of the efforts of the ISU and recently the ASA, there is a forum where the worldwide Salvage Community can come together, discuss their individual needs and concerns which can then be consolidated and brought to the attention of a representatives of insurance stakeholders for discussion and valuation; on a one-on-one basis. This is where the ISU truly excels, as it has the ability to meet with the top decision makers in the insurance industry. In a word, what we need is Communication; open and honest debate of issues that affect the industry as a whole. This is the only way to continue the positive momentum the salvage and Insurance interests have seen over the last 10 plus years. For this relationship to continue to evolve, the open and honest communication we have collectively fostered over the last 10 plus years is essential.
You’ve been involved in salvage for more than 32 years. What’s been the biggest change in the business since you got into it, why and is that a good thing?
The biggest change is the growth of regulatory oversight and involvement in even the most minor incidents. The idea of better and more direct communication between salvors and regulators has more often than not assisted the response team (i.e. salvors, regulators and owners) in providing a quicker and more efficient response as a result of the fact that all the decision makers required are all in one room. As with most things in life, better and more open and honest communication can do nothing but improve any situation.