Presentation on theme: "Presentation of Michael G. Roberts Marine Salvage Update Maritime Law Association / Instituto Iberoamericano de Derecho Maritimo Fajardo, Puerto Rico October."— Presentation transcript:
Presentation of Michael G. Roberts Marine Salvage Update Maritime Law Association / Instituto Iberoamericano de Derecho Maritimo Fajardo, Puerto Rico October 31, 2013
Company Overview 2 Crowley was founded in 1892, when Thomas Crowley — grandfather of current chairman, president and CEO Thomas B. Crowley, Jr. — purchased an 18-foot Whitehall boat to provide transportation of personnel and supplies to ships anchored in San Francisco Bay. Crowley has since grown into a strong, diversified, service-oriented company with primary interests in marine solutions, transportation and logistics. Today, the company has more than $2 billion in annual revenues; more than 5,000 employees; and owns / operates a fleet of more than 250 vessels. Other assets include terminals, warehouses, tank farms, office buildings, trucks, trailers, containers, chassis, cranes and other specialized vehicles.
Principal Businesses 3 Container Shipping & Logistics About 20 vessels in U.S. – C. America / Carib regional service Warehouse, trucking, Customs brokerage, etc. Technical Services Diversified menu of domestic & international services Petroleum Transportation 19 large tank vessels (17 ATBs) in domestic blue water trades; 4 MRs on order, plus options for 4 more. 5.5M bbls static capacity; average hull age less than 5 years. Petroleum Sales & Distribution Tank farms, fuel supply network in Alaska
Crowley Solutions 4 World-class ocean towing and barge transportation Vessel design and construction management Resource development project management Ship management (40+ vessels; MARAD, MSP, others) Marine salvage, wreck removal, emergency response
Titan Maritime 5 Founded in 1980 by David Parrot Acquired by Crowley Maritime in 2005 One of the very few organizations in the world doing marine salvage, emergency response and wreck removal as its core business Member of the Int’l Salvage Union (ISU) and the American Salvage Association (ASA) Depots in the US, UK, Singapore & Australia
1989 Salvage Convention – Codified traditional English and common law principles Peril to marine property Service not pursuant to pre-existing duty Applies in absence of contract General maritime duty to render assistance Master / owner has contracting authority Must cooperate with salvor to prevent / minimize environmental damage, and accept redelivery of vessel Salvor has a duty of care, including to protect the environment; must seek / accept aid when needed Marine Salvage – Legal Foundation
Salvage Contracts and Statistics Lloyd’s Open Form (LOF) No cure – No Pay Full set of rules, including London arbitration First LOF Contract 1892 11 Revisions culminating in LOF 2011 100-120 LOFs per Year Since 1978 About $31 Billion Saved Salvage Business = $400-$600 Million per Year LOF with SCOPIC (Special Compensation Protection and Indemnity Clause) Other contract forms may be used
Criteria for the Award Classic / Common Law Factors Nature & degree of risk or danger to vessel Salved value Risks assumed by salvors Salvor’s skill, energy & promptitude Salvor’s time & expense State of readiness & efficiency of equipment More Recent Additions Skill / effort / cost in preventing environmental damage Degree of success
COSTA CONCORDIA Volume & Complexity of Cargo - APL Panama Capacity 4,000 TEU 1,805 Containers Aboard Largest Award in History
ISU: RECOVERY OF POLLUTANTS Salvage operations: 244 (256 in 2008) Pollutants recovered: 1,022,730 tonnes (667,497 tonnes in 2008) 15,976,297 tonnes of potential pollutants recovered 1994 - 2009 Exxon Valdez Spill: 37,000 tonnes (1989)
Torrey Canyon 1967 Largest wreck of its time 120,000t crude oil spilled Outside UK waters $7.2M 3 rd Party Settlement $14.8M H&M Claim Limitation Liability 1851 Wreck Removal
Key features of Wreck Removal Wreck has no commercial value (CTL) Risk Covered by P&I not H&M Bid / award process vs. emergency response Nairobi Int’l Conv. Removal of Wrecks (2007) Authorizes coastal states to act where danger to navigation, environment BIMCO contract forms commonly used (WRECKHIRE (day rates); WRECKSTAGE (milestone payments); & WRECKFIX (single payment at completion) Other contract forms – sometimes not suited to wreck removal projects – may also be used
Salvage – Wreck Removal Continuum IG LCWG Found 3 Stages in Contracting Common SCOPIC Often Presages Wreck Removal Interim Contracts Usually for Fuel Removal While Tendering Wreck Removal Typically Fixed or Staged Delays in Switching or State Interference Forcing SCOPIC to Run Resulted in Cost Increases Sharing of Risk – More Global View Twenty largest projects included significant day rate components Many other projects beyond the top 20 primarily lump sum
Issues Facing the Industry Responder Immunity P&I or Salvors policy will cover loss; therefore, liability rules should drive best behaviors Owners/public need responsive, professional responders Responders need immunity from liability for ordinary negligence, not gross negligence or recklessness Mechanisms to deter frivolous claims Performance Guaranty Salvor agrees to cover cost of completion Not suitable given uncertainties in bidding No such clauses in standard BIMCO forms
COSTA CONCORDIA – A Perfect Storm Characteristics of Wreck 45,000 mt lightship, Salvage weight 55,000 – 75,000 mt Complex Heavily Damaged Structure Capsized Upslope Characteristics of Site Environmentally & Cultural Sensitivity – Removal Intact Complex Topography – Bridged Between Rock Ridges Complex Geology Casualty Occurred Winter 13 January
COSTA CONCORDIA – A Perfect Storm (Cont) Fuel Removal – 71 Days Dead of Winter Heavy State Oversight Crime Scene – Prosecutorial Permissions for All Operations Extraordinary Media Spotlight Heavy Environmental Requirements Meet of All Industrial Regulations Salvage or Offshore Construction??
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