Legal Analysis On The ISU Advice For Amendment Of Special Compensation Mechanism

Special Compensation mechanism which denotes a system regulating the legalrelationships resulted from salvers’ measures to prevent marine pollution, is such asignificant and special part not only in the international salvage regime but also inthe stipulations of Chapter9of China’s Maritime Law. On one hand, the reason whyit is significant is that, salvage of marine environment is playing an unprecedentedimportant role among the whole salvage business, with increasingly recognition andfear of the world to marine environmental damage. Nowadays, almost every marinecasualty contains environmental elements, and in the near future the internationalsalvage business structure tends to incline to the field of environmental salvagecontinuously. On the other hand, the reason why it is special is that marineenvironment, as an object of salvage which concerns about state interests and publicpolicy, has essential public characteristics. As a result there shall always begovernment interference during the salvage activities for marine environment whichleads to serious damage to the traditional principle of autonomy in salvage regime.Accordingly, marine salvage regime, which is ruled traditionally by private law, isinevitably shrouded in the shadow of public law features caused by national forces.Special compensation mechanism was firstly fixed as international legal text in1989Salvage Convention. More than twenty years after then, this system is facingup to great pressure of revision today. The International Salvage Union (ISU) whorepresents global marine salvage industry submitted an advice list to theInternational Maritime Committee (CMI) in2008about reviewing and revising the1989Convention, which was discussed in depth among interested parties such as allmember National Maritime Law Associations (NMLA) of CMI, International Groupof P&I clubs, International Shipping Convention (ICS) and London underwritersassociation etc. Among all the advice, the core points were the necessity to getspecial compensation mechanism rebuilt and the introduction of the concept‘Environmental Salvage Reward’ which meant to replace the special compensation mechanism by separating environmental elements from the original property salvagereward and set up an independent new type of salvage reward. The sum ofenvironmental salvage reward claimed by ISU shall be fixed relying on the degree ofenvironmental liabilities that ship owners would have born to a third party withoutthe actions taken by salvers’ to salve the casualty. Furthermore it shall not berestricted by the value of the properties salved, and shall be completely determinedby discretion of judges or arbitrators on the basis of experience and investigation.Therefore you can say the ISU amendment is a kind of thorough subversion to theoriginal special compensation system.In this paper, the author takes the specific points involved in ISU advice list andCMI internal research and debate as a breakthrough point, provides dynamicdevelopment perspective for the research of domestic theory in this field, analysesnecessity and feasibility of the revision of special compensation system combiningwith the advanced academic achievements of foreign scholars, and also explores thepossible method of solution and future development trend of the specialcompensation system from the perspective of game and balance among interestedparties in the international marine salvage regime. At this very time when China’sMaritime Law is facing the key nodes of revision, given the provisions of the ninthchapter of Maritime Law were almost completely derived from the1989Convention,the front-edge thoughts of reformation should be able to provide reference and helpto the perfection of the legal system of marine salvage in China, even if the proposedamendments of ISU has not passed currently with great controversial.In he first half of this paper, the author focuses on an analysis on the necessityof the amendment of special compensation mechanism and also on the feasibility ofthe methods suggested by ISU. More specifically, he aims at clarifying thesignificance of reformation and innovation of special compensation system throughrevealing the shortcomings of the main structure and content of the system itself andgreat changes of the external environment firstly. Then he carries out an analysis inthe light of the ISU advice, especially about resetting the applicable conditions ofenvironmental damage, building of the environmental salvage reward, arbitrationtransparency and other related aspects of the suggested item, and reveals the flaws of uncertainty and lack of realistic maneuverability of the ISU proposal to setenvironmental salvage reward through discussion on the theory and practice of‘liability salvage’. In the latter part of this paper, the author mainly uses the methodof dynamic analysis of interests in order to analyze the position and interests of thesalvers, property underwriters, liability insurers as traditional interested parties in themarine salvage regime and of the coastal states as a new type of interested party onenvironmental salvage issues. At the end of the article, the author, combining theactual conditions of salvage industry in our country and international advancedtheory achievements and ideas, tries to provides feasible advice and inspiration forthe revision and improvement of marine salvage legislation in China’s Maritime Lawand for the establishment of a salvage reward system reflecting balance between theinterests of all parties and according with the international legislation trend.