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Who gets to keep goods salvaged from ships - and at what risk?

In the wake of the Rena and Concordia disasters, TheJournal.ie takes a look into ship salvaging and the ownership of ‘lost’ cargo.

The MSC Napoli after running aground a mile off the coast of England in January 2007.
The MSC Napoli after running aground a mile off the coast of England in January 2007.
Image: Anthony Devlin/PA Wire

THE PAST YEAR has seen a number of serious maritime accidents which required help from salvage companies, such as the MV Rena crisis near New Zealand, and the Costa Concordia disaster off the Tuscan coast.

The first priority in shipping is safety, Mick Lacey, secretary-general of the International Salvage Union tells TheJournal.ie. You have to make sure that passengers and crew are taken care of before you start thinking about how to save the vessel.

“If you look at everyday life, people expect the lights to come on when they flick the switch and the shops to be open at certain times and the goods to be there. And if there’s a problem, then there’s the fire brigade and the police and the ambulance. At sea, there’s no fire service, ambulance, or police and if the ship is in trouble and it can’t handle those problems itself then it needs the assistance to come from somewhere else,” Lacey says.

And that ‘somewhere else’ is the salvor, a salvaging company comprised of divers, engineers and seamen who are called on in a crisis to recover the ship and its cargo.

But who owns ‘lost’ cargo, what are the dangers of salvaging, and what’s in it for the salvors?

Cargo free-for-all ‘myth’

When the cargo ship MSC Napoli ran into serious difficulty in the English Channel five years ago, dozens of containers were lost from the ship and washed up on the shore. Hundreds of people flocked to Devon’s beaches to pick up some of the strewn goods (including BMW motorbikes), and some of those people were apparently convinced that items lost at sea could be claimed by anyone upon reaching shore. Lacey says:

There’s a myth that if it’s on the beach, everybody can grab it. It’s actually a criminal offence to take cargo. If you find cargo, you have to report it to the Receiver of the Wreck and they will hold it until someone seeks to recover it.

The contents of such containers may carry, as was the case with the motorbikes off the Napoli, a shipment of items belonging to one person or company. On the other hand, a container may carry household goods belong to a person moving house, alongside items belonging to a dozen other people.

“The contents of a box always belong to the people who hired it for transport or to their insurers if they pay out,” Lacey points out.

People checking the contents of containers which washed ashore at Branscombe, Devon, England from the stricken Napoli in January 2007. (Barry Batchelor/PA Wire)

The ship and the cargo have a value to the salvor that can recover them – but that value is only based on whatever is recovered. An arbitrator looks at the work that was involved and the value of the cargo and then makes an award, but Lacey says that in the majority of cases a settlement is agreed between the owner and the salvor after the recovered goods have been totted up.

But running a salvage operation is hugely expensive, costing thousands and thousands of euros a day, especially if extensive diving is involved. Maritime historian Paul Louden-Brown said that some companies could potentially spend millions in the weeks it could take to recover cargo lost at sea.

A special clause agreed between the liability insurers and salvage industry can be added to the Lloyd’s Form to specify that the salvors recover their expenses plus a bonus of 25 per cent of those expenses. This ensures that at least their costs are covered if nothing can be recovered from the ship.

What the job involves

A salvor can’t help if the ship has sunk. For ships that are damaged but can still be kept afloat, a temporary patch could be put on the ship to get it to a port. But the crucial issue is time – and that’s where weather plays a central role.

“Time is of the essence, there’s no time for tenders or whatever. You need something there, and there immediately,” says Lacey.

What could start out as a repair job can deteriorate within days to a serious environmental crisis and a destroyed ship – as was the case with the Rena, which struck a reef off the coast of New Zealand in October 2011.

The hull was cracked in the crash, but bad weather prevented salvage teams from patching the ship up and getting it to shore. The split worsened, spilling huge quantities of fuel into the sea, before the ship finally broke apart in January. The stern section has since sunk. Hundreds of Rena’s containers have ended up in the sea, while tens of thousands of seabirds are believed to have died as a result of the oil spill.

Recovering the cargo is just one concern for the ship owners. Limiting the potential financial cost of the environmental damage encourages them to engage a salvage company as quickly as possible.

Louden-Brown says that in the case of the Costa Concordia, the salvage company will be primarily focused on getting the ship off the reef and out to a dry dock as quickly as possible.

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“There is the chance that in bad weather she’ll slip off the reef and sink,” he said. “The Italian authorities will not allow them to have a cruise ship lying on the sea bed.”

He and Lacey both say that the first step in a salvage operation is to remove the fuel to limit the environmental damage, then they can start looking at how to break up the ship for removal or at ways to patch it up and tow it ashore.

A volunteer cleans an oil-stained beach in Tauranga, New Zealand, October 2011 after the Rena struck a reef off-shore. (Natacha Pisarenko/AP/Press Association Images)

Hidden dangers

The salvage crew faces any number of possible complications while assessing a project or while carrying out the salvage operation, Lacey notes. For the sort of work these salvors are doing, it’s paramount that they have the right equipment and the right gear.

The first issue is the weather; if conditions turn sour, the salvors may find themselves operating in stormy conditions and have to make the call to carry on or pull out and wait for calmer seas. Different weather could make it dangerous for divers to enter the water, or for engineers to be landed on the ship by helicopter, or for a floating crane to operate.

Another potentially hazardous factor is the cargo itself. If a container ship has misdeclared cargo (which could be down to error or because the owner wanted to avoid certain duties or bans) the salvage crew could come up against materials that should not have been in the shipment and that react badly with seawater.

“The salvor has to be prepared for this,” says Lacey. “And these are the problems these guys know to watch out for.” He adds:

What you and I might regard as, ‘my God, I’m never going to do that,’ they will actually do, but there are times when you have to say that’s enough because the risks are too much.

Salvage companies are often engaged by a ship’s owner under the terms of the Lloyd’s Open Form, a century-old legal contract which can be used by ships or companies from different countries operating in other jurisdictions. “You just have to fill in the name of the ship and where the ship will be taken as decided by the owner – there has to be a place for the ship to be taken in safe condition – and that is all that has to be done,” Lacey says.

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