1)

WHAT IS VERIFICATION AS PER CHAPTER 9 OF SOLAS.

As Per Chapter 9 Of Solas Regulation 6 - Verification and control 1. The Administration shall periodically verify the proper functioning of the ships safety-management system. 2. A ship required to hold a certificate issued under the provisions of regulation 4.3 (Safety Management Certificate) shall be subject to (Port State)control (in accordance with the provisions of regulation XI/4). For this purpose such certificates shall be treated as a certificate issued under regulation I/12 or I/13. (Passenger Ship Safety Certificate, Cargo Ship Safety Construction Certificate, Cargo Ship Safety Equipment Certificate, Cargo Ship Safety Radio Certificate) What all Ques asked by PSC ?

2.2 Inspections
2.2.1 A PSCO may proceed to the ship and before boarding gain, from its appearance in the water, an impression of its standard of maintenance from such items as the condition of its paintwork, corrosion or pitting or unrepaired damage. 2.2.2. Ascertain the year of build and size of the ship for the purpose of determining which provisions of the conventions are applicable. 2.2.3. On boarding and introduction to the master or the responsible ships officer, the PSCO should examine the vessels relevant certificates and documents, as listed in appendix 4. When examining 1969 International Tonnage Certificates, the PSCO should be guided by appendix 4A. 2.2.4. If the certificates are valid and the PSCOs general impression and visual observations on board confirm a good standard of maintenance, the PSCO should generally confine the inspection to reported or observed deficiencies, if any. 2.2.5. If, however, the PSCO from general impressions or observations on board has clear grounds for believing that the ship, its equipment or its crew do not substantially meet the requirements. the PSCO should proceed to a more detailed inspection. taking into consideration chapter 3. 2.2.6. In pursuance of control procedures under chapter IX of SOLAS 74 on the International Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM Code), the PSCO should utilize the guidelines in paragraph 3.7. Appendix 4 - List of Certificates and Documents List of certificates and documents which to the extent applicable should be checked during the inspection referred to in 2.2.3 of the annex: 1. International Tonnage Certificate (1969); 2. Passenger Ship Safety Certificate; 3. Cargo Ship Safety Construction Certificate; 4. Cargo Ship Safety Equipment Certificate; 5. Cargo Ship Safety Radio Certificate; 6. Exemption Certificate; 7. Cargo Ship Safety Certificate; 8. Document of Compliance (SOLAS 74, regulation II-2/54); 9. Dangerous Goods Special List or Manifest, or Detailed Stowage Plan; 10. International Certificate of Fitness for the Carriage of Liquefied Gases in Bulk, or the Certificate of Fitness for the Carriage of Liquefied Gases in Bulk, whichever is appropriate;

11. International Certificate of Fitness for the Carriage of Dangerous Chemicals in Bulk, or the Certificate of Fitness for the Carriage of Dangerous Chemicals in Bulk, whichever is appropriate; 12. International Oil Pollution Prevention Certificate; 13. International Pollution Prevention Certificate for the Carriage of Noxious Liquid Substances in Bulk; 14. International Load Line Certificate (1966); 15. International Load Line Exemption Certificate; 16. Oil Record Book, parts I and II; 17. Shipboard Oil Pollution Emergency Plan; 18. Cargo Record Book; 19. Minimum Safe Manning Document; 20. Certificates of Competency; 21. Medical certificates (see ILO Convention No. 73); 22. Stability information; 23. Safety Management Certificate and copy of Document of Compliance (SOLAS chapter IX); 24. Certificates as to the ships hull strength and machinery installations issued by the classification society in question (only to be required if the ship maintains its class with a classification society); 25. Survey Report Files (in case of bulk carriers or oil tankers in accordance with resolution A.744(18)); 26. For ro-ro passenger ships, information on the A/A max ratio; 27. Document of authorization for the carriage of grain; 28. Special Purpose Ship Safety Certificate; 29. High-Speed Craft Safety Certificate and Permit to Operate High-Speed Craft; 30. Mobile Offshore Drilling Unit Safety Certificate; 31. For oil tankers, the record of oil discharge monitoring and control system for the last ballast voyage; 32. The muster list, fire control plan and damage control plan; 33. Ships log-book with respect to the records of tests and drills and the log for records of inspection and maintenance of life-saving appliances and arrangements; 34. Procedures and Arrangements Manual (chemical tankers); 35. Cargo Securing Manual; 36. Certificate of Registry or other document of nationality; 37. Garbage Management Plan; 38. Garbage Record Book; 39. Bulk carrier booklet (SOLAS chapter VI regulation 7); and 40. Reports of previous port State control inspections

3.7 Guidelines for port State control related to the ISM Code 3.7.1. To the extent applicable, the PSCO should examine the copy of the Document of Compliance (DOC), issued to the Company, and the Safety Management Certificate (SMC), issued to the ship. An SMC is not valid unless the Company holds a valid DOC for that ship type. The PSCO should in particular verify that the type of ship is included in the DOC and that the Companys particulars are the same on both the DOC and the SMC. 3.7.2. During the examination of on board documents and certificates, PSCOs should recognize: .1. that differences may exist between the classification societies designation of "bulk carrier" that appear on the class certificate as defined in their individual Rules, versus the interpretation of "bulk carrier" contained in SOLAS/CONF.4/25, annex, resolution 6 and that the latter definition should be used to determine if the ship should have been certified by 1 July 1998; .2. the common practice of issuing, after successfully completing an audit, SMCs and DOCs valid for a period not exceeding 5 months, to cover the period between completion of the audit and issuance of the full term certificate by either the Administration or the recognized organization; and .3. that the current valid DOC with proper annual endorsements is normally only available in the Company to which it has been issued and that the copy on board may not reflect the annual endorsements that exist on the valid DOC held by the Company. 3.7.3. If a ship has been issued with Interim Certificates (DOC and/or SMC), the PSCO should check whether they have been issued in accordance with the provisions of paragraphs 3.3.2 and 3.3.4 of resolution A.788(19). 3.7.4. A more detailed inspection of the Safety Management System (SMS) should be carried out if clear grounds are established. Clear grounds may include absent or inaccurate ISM Code certification or detainable (or many nondetainable) deficiencies in other areas. 3.7.5. When carrying out a more detailed inspection, the PSCO may utilize, but not be limited to, the following questions to ascertain the extent of compliance with the ISM Code (references to the relevant paragraphs of the ISM Code are given in italic print in brackets). .1. Is there a Company safety and environmental protection policy and is the appropriate ships personnel familiar with it? (2.2) .2. Is safety management documentation (e.g. manual) readily available on board? (11.3) .3. Is relevant documentation on the SMS in a working language or language understood by the ships personnel? (6.6) .4. Can senior ship officers identify the Company responsible for the operation of the ship and does this correspond with the entity specified on the ISM Code certificates? (3) .5. Can senior ship officers identify the "designated person"? (4) .6. Are procedures in place for establishing and maintaining contact with shore management in an emergency? (8.3) .7. Are programmes for drills and exercises to prepare for emergency actions available on board? (8.2) .8. How have new crew members been made familiar with their duties if they have recently joined the ship and are instructions which are essential prior to sailing available? ( 6.3) .9. Can the master provide documented proof of his responsibilities and authority, which must include his overriding authority? (5) .10. Have non-conformities been reported to the Company and has corrective action been taken by the Company? PSCOs should not normally scrutinise the contents of any Non Conformity Note (NCN) resulting from internal audits. (9.1, 9.2) .11. Does the ship have a maintenance routine and are records available? ( 10.2) 3.7.6. Deficiencies in the Safety Management System should be recorded in the PSCOs inspection report. The port State authority should, if necessary, inform the flag State of deficiencies found in the SMS. Those deficiencies identified in the SMS, which are defined as major non-conformities in resolution A.788(19), have to be rectified before sailing. The procedures set out in chapter 4 are applicable."

2)

WHAT IS SUSPENSION OF INSPECTION?

4.6 Suspension of inspection

4.6.1. In exceptional circumstances where, as a result of a more detailed inspection, the overall condition of a ship and its equipment and crew conditions are found to be substandard, the PSCO may suspend an inspection. 4.6.2. Prior to suspending an inspection, the PSCO should have recorded detainable deficiencies in the areas set out in appendix 1, as appropriate. 4.6.3. The suspension of the inspection may continue until the responsible parties have taken the steps necessary to ensure that the ship complies with the requirements of the relevant instruments. 4.6.4. In cases where the ship is detained and an inspection is suspended, the port State Authority should notify the responsible parties without delay. The notification should include information about the detention, and state that the inspection is suspended until that authority has been informed that the ship complies with all relevant requirements.

Appendix 1 - Guidelines for the Detention of Ships 1 Introduction

. When deciding whether the deficiencies found in a ship are sufficiently serious to merit detention the PSCO should assess whether: 1. ship has relevant, valid documentation; 2. ship has the crew required as per minimum Safe Manning Document. During inspection the PSCO should further assess whether the ship and/or crew, throughout its forthcoming voyage, is able to: 3. navigate safely; 4. safely handle, carry and monitor the condition of the cargo; 5. operate the engine room safely; 6. maintain proper propulsion and steering; 7. fight fires effectively in any part of the ship if necessary; 8. abandon ship speedily and safely and effect rescue if necessary; 9. prevent pollution of the environment; 10. maintain adequate stability; 11. maintain adequate watertight integrity; 12. communicate in distress situations if necessary; 13. provide safe and healthy conditions on board.

2 General
1. The lack of valid certificates as required by the relevant instruments may warrant the detention of ships. However, ships flying the flag of States not a Party to a convention or not having implemented another relevant instrument, are not entitled to carry the certificates provided for by the convention or other relevant instrument. Therefore, absence of the required certificates should not by itself constitute a reason to detain these ships; however, in applying the "no more favourable treatment" clause, substantial compliance with the provisions and criteria specified in this document must be required before the ship sails.

3 Detainable deficiencies
. If the result of any of these assessments is negative, taking into account all deficiencies found, the ship should be strongly considered for detention. A combination of deficiencies of a less serious nature may also warrant the detention of the ship. Ships which are unsafe to proceed to sea should be detained upon the first inspection irrespective of the time the ship will stay in port.

Areas under the SOLAS Convention

1. Failure of proper operation of propulsion and other essential machinery, as well as electrical installations.

2. Insufficient cleanliness of engine room, excess amount of oily-water mixture in bilges, insulation of piping including exhausts pipes in engine room contaminated by oil, and improper operation of bilge pumping arrangements. 3. Failure of the proper operation of emergency generator, lighting, batteries and switches. 4. Failure of proper operation of the main and auxiliary steering gear. 5. Absence, insufficient capacity or serious deterioration of personal life-saving appliances, survival craft and launching arrangements. 6. Absence, non-compliance or substantial deterioration to the extent that it can not comply with its intended use of fire detection system, fire alarms, fire-fighting equipment, fixed fire-extinguishing installation, ventilation valves, fire dampers, and quick-closing devices. 7. Absence, substantial deterioration or failure of proper operation of the cargo deck area fire protection on tankers. 8. Absence, non-compliance or serious deterioration of lights, shapes or sound signals. 9. Absence, or failure of the proper operation of the radio equipment for distress and safety communication. 10. Absence or failure of the proper operation of navigation equipment, taking the relevant provisions of SOLAS regulation V/12(0) into account. 11. Absence of corrected navigational charts, and/or all other relevant nautical publications necessary for the intended voyage, taking into account that electronic charts may be used as a substitute for the charts. 12. Absence of non-sparking exhaust ventilation for cargo pump rooms. 13. Serious deficiency in the operational requirements listed in 3.5.1 to 3.5.69. 14. Number, composition or certification of crew not corresponding with safe manning document. 15. Non-implementation of the enhanced programme of inspection under resolution A.744(18).

Areas under the IBC Code

1. Transport of a substance not mentioned in the Certificate of Fitness or missing cargo information. 2. Missing or damaged high pressure safety devices. 3. Electrical installations not intrinsically safe or not corresponding to the code requirements. 4. Sources of ignition in hazardous locations. 5. Contravention of special requirements. 6. Exceeding of maximum allowable cargo quantity per tank. 7. Insufficient heat protection for sensitive products.

Areas under the IGC Code

1. Transport of a substance not mentioned in the Certificate of Fitness or missing cargo information. 2. Missing closing devices for accommodations or service spaces. 3. Bulkhead not gastight. 4. Defective air locks. 5. Missing or defective quick-closing valves. 6. Missing or defective safety valves. 7. Electrical installations not intrinsically safe or not corresponding to the code requirements. 8. Ventilators in cargo area not operable.

9. Pressure alarms for cargo tanks not operable. 10. Gas detection plant and/or toxic gas detection plant defective. 11. Transport of substances to be inhibited without valid inhibitor certificate.

Areas under the Load Lines Convention

1. Significant areas of damage or corrosion, or pitting of plating and associated stiffening in decks and hull effecting seaworthiness or strength to take local loads, unless properly authorized temporary repairs for a voyage to a port for permanent repairs have been carried out. 2. A recognized case of insufficient stability. 3. The absence of sufficient and reliable information, in an approved form, which by rapid and simple means, enables the master to arrange for the loading and ballasting of the ship in such a way that a safe margin of stability is maintained at all stages and at varying conditions of the voyage, and that the creation of any unacceptable stresses in the ships structure are avoided. 4. Absence, substantial deterioration or defective closing devices, hatch closing arrangements and watertight/weathertight doors. 5. Overloading. 6. Absence of, or impossibility to read, draught marks and/or Load Line marks.

Areas under MARPOL Convention, Annex I

1. Absence, serious deterioration or failure of proper operation of the oily-water filtering equipment, the oil discharge monitoring and control system or the 15ppm alarm arrangements. 2. Remaining capacity of slop and/or sludge tank insufficient for the intended voyage. 3. Oil Record Book not available. 4. Unauthorized discharge bypass fitted. 5. Failure to meet the requirements of 13G(4) or alternative requirements specified in regulation 13G(7).

Areas under the MARPOL Convention, Annex II

1. Absence of P and A Manual. 2. Cargo is not categorized. 3. No Cargo Record Book available. 4. Transport of oil-like substances without satisfying the requirements. 5. Unauthorized discharge bypass fitted.

Areas under the STCW Convention

1. Failure of seafarers to hold a certificate, to have an appropriate certificate, to have a valid dispensation or to provide documentary proof that an application for an endorsement has been submitted to the Administration. 2. Failure to comply with the applicable safe manning requirements of the Administration. 3. Failure of navigational or engineering watch arrangements to conform to the requirements specified for the ship by the Administration. 4. Absence in a watch of a person qualified to operate equipment essential to safe navigation, safety radio communications or the prevention of marine pollution. 5. Inability to provide for the first watch at the commencement of a voyage and for subsequent relieving watches persons who are sufficiently rested and otherwise fit for duty.

Areas which may not warrant a detention, but where, e.g., cargo operations have to be suspended
Failure of the proper operation (or maintenance) of inert gas system, cargo related gear or machinery will be considered sufficient grounds to stop cargo operation.

FUNCTIONAL REQUIREMENTS OF GMDSS

Regulation 4 Functional requirements*

1 Every ship, while at sea, shall be capable: .1 transmitting ship-to-shore distress alerts by at least two separate and independent means, each using a different radio communication service; .2 receiving shore-to-ship distress alerts; .3 transmitting and receiving ship-to-ship distress alerts; .4 transmitting and receiving search and rescue co-ordinating communications; .5 transmitting and receiving on-scene communications; .6 transmitting and receiving locating signals; .7 transmitting and receiving maritime safety information; .8 transmitting and receiving general radiocommunications to and from shore-based radio systems or networks .9 transmitting and receiving bridge-to-bridge communications.
Receive navigational and meteorological warnings and urgent safety information (Maritime Safety Information). WHAT IS HARMONISATION OF CONTINGENCY PLAN. A852.

IMO Resolution A.852(20) - Guidelines for a Structure of an Integrated System of Contingency Planning for Shipboard Emergencies - (Adopted on 27 November 1997) - Annex - Guidelines for a Structure of an Integrated System of Contingency Planning for Shipboard Emergencies - Preface Preface These Guidelines, prepared by the Maritime Safety Committee (MSC) of the International Maritime Organization (IMO), contain guidance to assist in the preparation of an integrated system of contingency planning for shipboard emergencies. It is intended to be used for the preparation and use of a module structure of an integrated system of shipboard emergency plans. The high number of non-harmonized shipboard contingency plans justifies the development of an integrated system and the harmonization of the structure of contingency plans. Shipboard emergency preparedness is required under chapter 8 of the ISM Code referred to in chapter IX of the SOLAS Convention, as amended, under chapter III, regulation 24-4 of the SOLAS Convention, as adopted at the SOLAS Conference November 1995, and under MARPOL 73/78, Annex I, regulation 26. To implement the SOLAS and MARPOL regulations, there must be shipboard procedures and instructions. These Guidelines provide a framework for formulating procedures for the effective response to emergency situations identified by the company and shipboard personnel. In this context the main objectives of these Guidelines are:

to assist companies in translating the requirements of the regulations into action by making use of the structure of the integrated system; to integrate relevant shipboard emergency situations into such a system; to assist in the development of harmonized contingency plans which will enhance their acceptance by shipboard personnel and their proper use in an emergency situation; to encourage Governments, in the interests of uniformity, to accept the structure of the integrated system as being in conformity with the provisions for development of shipboard contingency plans as required by various IMO instruments, and to refer to these Guidelines when preparing appropriate national legislation.

1 General remarks 1.1. The ISM Code establishes an international standard for the safe management and operation of ships by defining

elements which must be taken into account for the organization of company management in relation to ship safety and pollution prevention. Since emergencies, as well as cargo spillage, cannot be entirely controlled either through design or through normal operational procedures, emergency preparedness and pollution prevention should form part of the companys ship safety management. For this purpose, every company is required by the ISM Code to develop, implement and maintain a Safety Management System (SMS). 1.2. Within this SMS, procedures for describing and responding to potential shipboard emergency situations are required. 1.3. If the preparation of response actions for the many possible varying types of emergency situations which may occur are formulated on the basis of a complete and detailed case-by-case consideration, a great deal of duplication will result. 1.4. To avoid duplication, shipboard contingency plans must differentiate between "initial actions" and the major response effort involving "subsequent response", depending on the emergency situation and the type of ship. 1.5. A two-tier course of action provides the basis for a modular approach, which can avoid unnecessary duplication. 1.6. It is recommended that a uniform and integrated system of shipboard emergency plans should be treated as part of the International Safety Management (ISM) Code, forming a fundamental part of the companys individual Safety Management System (SMS). 1.7. An illustration of how such a structure of a uniform and integrated system of shipboard emergency plans with its different modules can be incorporated into an individual SMS is shown in appendix 1.

2 Integrated system of contingency plans for shipboard emergencies 2.1 Scope 2.1.1. The integrated system of shipboard emergency plans (hereinafter referred to as the "system") should provide a framework for the many individual contingency plans (hereinafter referred to as the "plans"), tailored for a variety of potential emergencies, for a uniform and modular designed structure. 2.1.2. Use of a modular designed structure will provide a quickly visible and logically sequenced source of information and priorities, which can reduce error and oversight during emergency situations. 2.2 Structure of the system 2.2.1. The structure of the system comprises the following six modules, the titles of which are: Module I : Introduction Module II : Provisions Module III : Planning, preparedness and training Module IV: Response actions Module V : Reporting procedures Module VI: Annex(es). An example of the arrangement of these modules is shown in appendix 2. 2.2.2. Each module should contain concise information to provide guidance and to ensure that all appropriate and relevant factors and aspects, through the various actions and decisions during an emergency response, are taken into account. 2.3 Concept of the system 2.3.1. The system is intended as a tool for integrating the many different plans into a uniform and modular structured frame. The broad spectrum of the many required plans which may be developed by a company will result in the duplication of some elements (e.g. reporting) of these plans. Such duplication can be avoided by using the modular structure of the system referred to in 2.2.1. 2.3.2. Although the initial action taken in any emergency will depend upon the nature and extent of the incident, there are some immediate actions which should always be taken the so-called "initial actions" (see appendix 4).

Therefore, a distinction within the plans between "initial actions" and "subsequent response", which depends on variables like the ships cargo, type of the ship, etc., will help to assist shipboard personnel in dealing with unexpected emergencies and will ensure that the necessary actions are taken in a priority order. 2.3.3. "Subsequent response" is the implementation of the procedures applicable to the emergency.

Define MSA ? An Act to foster the development and ensure the efficient maintenance of an Indian mercantile marine in a manner best suited to serve the national interests and for that purpose to establish a National Shipping Board and a Shipping Development Fund, to provide for the registration, certification, safety and security of Indian ships and generally to amend and consolidate the law relating to merchant shipping.

MARPOL 73/78 ANNEX II REG 12 Design Cons Arrangement Equip

Regulation 12 - Pumping, piping, unloading arrangements and slop tanks

1. Every ship constructed before 1 July 1986 shall be provided with a pumping and piping arrangement to ensure that each tank certified for the carriage of substances in Category X or Y does not retain a quantity of residue in excess of 300 litres in the tank and its associated piping and that each tank certified for the carriage of substances in Category Z does not retain a quantity of residue in excess of 900 litres in the tank and its associated piping. A performance test shall be carried out in accordance with appendix 5 of this Annex. 2. Every ship constructed on or after 1 July 1986 but before 1 January 2007 shall be provided with a pumping and piping arrangement to ensure that each tank certified for the carriage of substances in Category X or Y does not

retain a quantity of residue in excess of 100 litres in the tank and its associated piping and that each tank certified for the carriage of substances in Category Z does not retain a quantity of residue in excess of 300 litres in the tank and its associated piping. A performance test shall be carried out in accordance with appendix 5 of this Annex. 3. Every ship constructed on or after 1 January 2007 shall be provided with a pumping and piping arrangement to ensure that each tank certified for the carriage of substances in Category X, Y or Z does not retain a quantity of residue in excess of 75 litres in the tank and its associated piping. A performance test shall be carried out in accordance with appendix 5 of this Annex. 4. For a ship other than a chemical tanker constructed before 1 January 2007 which cannot meet the requirements for the pumping and piping arrangements for substances in Category Z referred to in paragraphs 1 and 2 of this regulation no quantity requirement shall apply. Compliance is deemed to be reached if the tank is emptied to the most practicable extent. 5. Pumping performance tests referred to in paragraphs 1, 2 and 3 of this regulation shall be approved by the Administration. Pumping performance tests shall use water as the test medium. 6. Ships certified to carry substances of Category X, Y or Z shall have an underwater discharge outlet (or outlets). 7. For ships constructed before 1 January 2007 and certified to carry substances in Category Z an underwater discharge outlet as required under paragraph 6 of this regulation is not mandatory. 8. The underwater discharge outlet (or outlets) shall be located within the cargo area in the vicinity of the turn of the bilge and shall be so arranged as to avoid the re-intake of residue/water mixtures by the ships seawater intakes. 9. The underwater discharge outlet arrangement shall be such that the residue/water mixture discharged into the sea will not pass through the ships boundary layer. To this end, when the discharge is made normal to the ships shell plating, the minimum diameter of the discharge outlet is governed by the following equation:

where: d = minimum diameter of the discharge outlet (m) Ld = distance from the forward perpendicular to the discharge outlet (m) Qd = the maximum rate selected at which the ship may discharge a residue/water mixture through the outlet (m3/h). 10. When the discharge is directed at an angle to the ships shell plating, the above relationship shall be modified by substituting for Qd the component of Qd which is normal to the ships shell plating. 11. Slop tanks Although this Annex does not require the fitting of dedicated slop tanks, slop tanks may be needed for certain washing procedures. Cargo tanks may be used as slop tanks.

LOF and SCOPIC

No Cure No Pay

The underlying principle of salvage law and LOF has, until recently, always been no cure no pay. The salvors award was based on the value of the property salved and could never exceed it. If at the end of the day the salvor failed, or the ship and cargo had no value, then he received nothing for his efforts, regardless of the expense he had incurred. Consequently, there was no incentive for a salvor to embark on a lengthy and costly salvage operation if the chances of success were poor and the salved value would be low, even if the ship posed a significant threat to the environment. As so often happens, it took a major disaster to produce a change, and following the grounding of the Amoco Cadiz and subsequent pollution off France in 1978, it was quickly realised that action had to be taken. This effectively occurred in three stages.
LOF 1980

This edition of the worlds most used salvage contract contained an express obligation on the salvor to use his best Endeavours to prevent the escape of oil from the vessel being salved and, in the first departure from the no cure no pay principle, provided that, if the vessel was a laden tanker, the salvor could claim a minimum remuneration equal to his expenses, plus 15% uplift even if the salvage was unsuccessful.
The Salvage Convention 1989

The next step was the introduction of the London Salvage Convention3. This convention was incorporated into LOF 90, but did not come into force on an international basis until 1996.

Article 13 of the Convention contains ten criteria to be taken into account when assessing a conventional property award, including a new element, the skill and efforts of the salvor in preventing or minimising damage to the environment. However, Article 14 provided that whenever there was a threat of damage to the environment, a salvor should be entitled, as a minimum, to his expenses and, if he was successful in preventing damage to the environment, to an uplift of up to 100%. The special compensation, which is usually payable by the owners P&I Club, covered the salvors out of pocket expenses plus a fair rate for his equipment and personnel and was payable to the extent that it exceeded the traditional Article 13 Award (if any). Although both LOF 90 and LOF 95 included the provisions of Article 14, it was soon clear that there were a number of problems of which the most significant were:

Owners and the P&I Club had little or no control over or involvement in the salvage operations. Salvors could not get special compensation for pollution cases outside coastal or inland waters.

Following the UK House of Lords decision on the Nagasaki Spirit4, fair rates were determined on a cost rate basis and did not include any element of profit unless the operations were successful. Further, assessment of the rates became extremely complicated. Arbitrations became lengthy and very costly as it became necessary for all parties to use environmental auditors to establish whether the casualty posed a threat to the environment, and accountants to establish a fair rate for equipment and personnel used. The salvors could not always obtain security for Special Compensation claims.

SCOPIC (Special Compensation P&I Club) Clause

As a result of these problems, all sides of the industry co-operated to find a solution. The result appeared in August 1999 as the Special Compensation P&I Club clause.
Basic Elements of SCOPIC

The SCOPIC clause is a purely voluntary addition to LOF, but once incorporated into the LOF contract it effectively replaces Article 14. However, even when included in LOF, SCOPIC will only operate if and when the salvor gives written notice to the ship owners that he is invoking the clause. Unless this is done, the clause will not apply save to the extent that it replaces Article 14. The clause can only be invoked by the salvor not by the ship owners. Furthermore, the salvor can invoke the clause at any time, irrespective of whether there is a threat of damage to the environment or whether the vessel is on the high seas. A central element of SCOPIC relates to the application of preagreed tariff rates5, containing a profit element for all vessels, equipment and personnel involved in the salvage operations. In consequence, the salvor does not have to establish a threat of damage to the environment, nor what is a fair rate as required under Article 14. In summary, the clause provided the Clubs and the owners with the all-important ability to cost the operations on a day to day basis; and it provided the salvor with the confidence that he would receive satisfactory remuneration at the end of the operations.
Developments

SCOPIC was an immediate success and within the first 12 months the clause had been incorporated into salvage contracts on 23 occasions, with the majority of claims being settled at an early stage and none having to be arbitrated. However, in practice, a number of teething problems were revealed during its early use resulting in the clause being revised to coincide with the latest Lloyds Form LOF 2000.
LOF 2000

The new LOF, which was introduced in September 2000, contains a number of improvements. The most obvious is the striking reduction from the six comprehensive pages of LOF 95 to the two sides of LOF 2000 containing nine clear BIMCO type boxes for completion by the parties and twelve plain language clauses. All procedural and administrative details have been removed to a separate set of clauses6. In this way, LOF has regained one of its original benefits: that of being a clear contract, easily understood by the parties, and capable of agreement without hesitation so that salvage operations can begin without delay.
LOF 2000 and the Environment

In addition to these improvements, LOF 2000 incorporated three provisions expressly relating to environmental issues:

The form7 now requires the parties to state expressly whether the SCOPIC clause is incorporated into the contract or not. However, even if this is confirmed, in order for the clause to operate, it must still be invoked by the salvor giving written notice to the owners. The salvors duty to prevent or minimise damage to the environment8 is repeated from LOF 95. It is therefore a reminder that Article 13 (Property) Awards are often enhanced by salvors efforts to prevent damage to the environment. It is now a mandatory requirement for the shipowner to supply urgent information to the salvor when it relates to the performance of the services9. Examples of this requirement would be details of bunker stowage and tank plans, or IMDG lists and bay plans in the case of container vessels.
SCOPIC 2000

With the introduction of LOF 2000, a revised SCOPIC was introduced to address a number of matters which needed clarification. The amended version of SCOPIC, known as SCOPIC 2000, came into force in September 2000. It is worth considering some of the main provisions and commenting on their practical effect:

Incorporation The SCOPIC clause is supplementary to any Lloyds form of salvage agreement it is not compulsory; however, once the SCOPIC clause has been incorporated into the main agreement, then a claim for special compensation under Article 14 is no longer available. The only exception to this is if security is not provided within the required period, in which case the salvor can revert to his original Article 14 rights.

Invoking the SCOPIC clause In order to invoke the SCOPIC clause, the salvor must provide written notice. SCOPIC remuneration only runs from this time. There does not have to be a threat of damage to the environment and consequently, the salvor is required to make a conscious decision as to whether and when he wishes SCOPIC to apply. Security As soon as SCOPIC is invoked, the owner must provide security by way of a bank guarantee or P&I Club letter in the sum of US$3 million (inclusive of interest and costs) within two working days. Whilst this may seem a very high amount of security, the figure can subsequently be reduced or increased by agreement between the parties or by the Lloyds arbitrator. In practice, the initial amount of security is often agreed at an appropriate figure between the parties.

Withdrawal If initial security is not provided within two days, the salvor is entitled to withdraw from the SCOPIC provision, and revert to his rights under Article 14. However, the salvor can only withdraw if at that time security has not been provided. Consequently if, for practical reasons, the guarantor cannot move quickly enough to provide the security within two working days and security is lodged at a later date, the salvor will be able to withdraw from SCOPIC only if he has given notice of withdrawal before the security is actually provided.

Tariff rates These are set out in an Appendix to SCOPIC10 and consist of agreed daily rates for tugs, personnel and equipment. In order to build in an element of profit, a standard uplift of 25% is automatically added. The tariff rates also apply to out of pocket expenses of the salvor where he has to hire in equipment. However, where the actual cost for hired-in equipment is higher than the tariff rates, the actual cost is allowed in full under SCOPIC, subject to agreement between the parties, or, ultimately, the decision of the arbitrator. The amended SCOPIC has now made it clear that out of pocket expenses are also entitled to receive the 25% standard uplift. Also, if the salvor reasonably mobilises equipment which is not used, he is entitled to a standby rate of 50% of the tariff figure. This is intended to prevent costly delays while salvors try to source additional equipment in order to complete the services.

Termination The termination provisions are an important consideration for both the owner and the salvor. i) The salvor is entitled to terminate the services both under SCOPIC and LOF if the cost of the anticipated services is likely to exceed the total of both the value of the property being salved and all sums to which the salvor is entitled under SCOPIC. In practice, this is only likely to occur where the vessel has become a CTL (constructive total loss) and the owner has withdrawn from SCOPIC under (ii) below. (ii) The owners may at any time terminate their obligation to pay under the SCOPIC provisions provided they give the salvor at least five clear days notice. However, neither party can terminate if the salvor is required to remain on site by the relevant local authorities. In reality, if following a grounding the vessel has become a CTL and the owners are facing a Wreck Removal Order, it is likely that the owners and their P&I Club will negotiate a termination of SCOPIC once the bunkers have been removed. However, they will probably only be allowed to do this if they have satisfied the local authorities that a wreck removal contract has been concluded.

Duties of the salvor These remain the same as under LOF. The salvor must use his best endeavours to

salve the ship and property and to prevent or minimise any damage to the environment. By using his best endeavours, he will be entitled to SCOPIC remuneration for preventing pollution as well as the removal of pollution in the immediate vicinity of the vessel, but only if this is necessary to carry out the salvage. There have been a number of instances where salvors have been directed by the local authority to carry out pollution prevention or oil clean-up work away from the casualty, and the salvor has then tried to claim it from the owner as part of SCOPIC. The provision is clear, and the owner should resist such claims which the salvor must then pursue with the local authority.

General Average The liability to pay SCOPIC remuneration falls on the owner and his liability underwriters alone. It is not a General Average expense, and no claim for SCOPIC remuneration can be made in General Average.
Shipowners Casualty Representatives

One of the big advantages of SCOPIC has been the improved communication between salvors and owners (and their P&I Club) during the salvage operations. This has resulted from the optional appointment of a Shipowners Casualty Representative (SCR) to attend on site throughout the SCOPIC services. His terms of reference are set out in an appendix to SCOPIC11. The SCR must be selected from a panel of representatives and, although he has no authority to bind the owners, he must report to them daily and use his best endeavours to assist in the operations. In most SCOPIC cases to date, he has provided an invaluable service to both the owner and the Club. The SCR is required to keep them informed on a daily basis as to the progress and cost of the operation. Further, by virtue of his experience, he is often able to assist the Salvage Master in dealing with the often impossible requirements of the local authorities.
Special Representatives

Under SCOPIC hull and cargo interests may also appoint Special Representatives12 to attend and report on the salvage operation. They are permitted full access to the vessel and to inspect any ships documents that are relevant to the salvage operation. The salvor can, however, limit access both to the vessel and to documentation if he reasonably feels that their presence would impede or endanger the salvage operation.Owners should be aware that this right could lead to sensitive documents becoming available to potentially opposing parties at an early stage.
The Future

Is SCOPIC working? The answer is most definitely yes. At the time of writing SCOPIC had been invoked on 42 occasions and virtually all claims have been agreed without recourse to arbitration. There have been one or two cases where practical difficulties have arisen, but due to the common sense of the SCR they have usually been capable of being resolved at an early stage. SCOPIC has not only overcome the salvors reluctance to agree a LOF where he is not sure of the ultimate salved values, but it has also encouraged owners to enter into LOF knowing that they (and their liability underwriters) will have better control over and knowledge of the salvage operations and the ultimate cost. A further advantage is that SCOPIC has proved to be a useful bridge between traditional salvage and wreck removal operations. The future is therefore encouraging, and it is in the interests of the environment, and the maritime industry as a whole, that SCOPIC continues to be used. KEY POINTS

Salvage and the environment

any).

SCOPIC means Special Compensation P&I Club clause. SCOPIC 2000 came into force in September 2000. Incorporation into LOF is recommended by P&I Clubs. Once incorporated, no Article 14 compensation is available, subject to the provision of adequate security (see below). SCOPIC can only be invoked by the salvor who must do so in writing. Within two days of being invoked, the owner must provide the salvor with a guarantee for US$3 million (or other amount as agreed). Failure to provide adequate security means that the salvor has the right to revert to Article 14 if he so wishes. SCOPIC remuneration is based on agreed tariff rates, plus a standard 25% uplift. It is payable to the extent that it exceeds the traditional Article 13 Salvage Award (if The owner may terminate by giving five clear days notice providing the salvor is not required to remain on scene by the relevant authorities involved.