Nigel Lowry

More transparency from all sides would be a welcome first step in determining what is needed to ensure the sector is restored to health

SALVAGE has always been an emotive subject. Its legitimacy is rooted in someone else’s ill fortune. In the old days, there was a lazy prejudice against salvors, which saw them cast as predators.

In the modern era, salvage groups have developed technically to stay abreast of challenges posed by larger, more sophisticated vessels.

But they still take risks that deserve proper reward. They are the maritime fire brigade — in the case of vessel fires, quite literally so.

If anything, given their role in preventing pollution, the often-repeated need for salvage awards that encourage salvors should be more readily appreciated now than ever.

Last year, members of the International Salvage Union rendered assistance to vessels carrying an aggregate of 2.7m tonnes of potential pollutants, including more than 2m tonnes of oil, chemicals and bunker fuel.

Notwithstanding this, there will always be those who feel salvors have been earning too much, although that position is harder to hold in light of the latest figures from the ISU.

Cited in this month’s cover story of The Intelligence, they show a potentially calamitous drop in income across the board. On the ground and at sea, salvage personnel are being cut and tugs laid up.

Cut-throat competition among salvors is part of the explanation, but it is also the case that the insurance industry has been jerking the leash, in some cases pretty roughly.

The most visible tip of this has been a steady erosion of insurers’ support for Lloyd’s Open Form. Even that development continues to be obfuscated by a virtual Greek chorus of P&I clubs chanting their “strong” support for LOF.

Less well-documented is that such LOFs being signed these days are as likely as not governed by a private side-agreement.

Having broadly accepted insurers’ demands for cheaper, commercial contracts as an alternative to LOF, many salvors are now finding that remuneration under these is also being squeezed.

For their part, salvors too are often reluctant to discuss salvage contracts and awards.

Meanwhile, the ISU has been extraordinarily muted in its warnings about the consequences of the backlash against LOF. It still invests hope that the market — if properly educated in LOF’s benefits — can fall in love with the contract all over again.

The maritime industry at large needs to feel confident in having sufficient emergency response capacity and expertise out there. The market therefore needs to maintain a contracting culture that can sustain a viable salvage industry into the future.

At the same time, awards cannot be so high that committed salvors are priced out of the market.

LOF was, for a long time, seen as the best and fairest system, balancing policy and market considerations.

More transparency from all sides would be a welcome first step in understanding what exactly has changed and what actions are necessary to ensure the sector is restored to health.