The statutory rights of shipowners, underwriters, and the US Coast Guard in a ship’s emergency are under attack, and the result will be degraded response capability.
Imagine a scenario where you hire a contractor who sue you and pressure the government to pass a law requiring you to use them indefinitely. Unfortunately, this could become a reality for all ship owners, operators and insurers if Section 401 of the United States Coast Guard Licensing Act of 2022 proposed by the United States House of Representatives is passed in the next few days. weeks.
This section’s proposed change to OPA 90 would make it impossible to change a lifeguard while on a project in US waters. There are currently three major OPA 90 Salvage and Marine Firefighting (SMFF) service providers, and two of them (Resolve Marine included) oppose Section 401. The third rescuer is Donjon-SMIT, which has called for the legislation proposed.
When the M/V golden ray capsized off Georgia in 2019, Donjon-SMIT was the contractor selected for the shipowner. After several months in the project, Donjon-SMIT was informed that a tendering process would take place and that he could eventually be replaced as lifeguard on the Ray of gold.
Donjon-SMIT’s response to the request for a change of lifeguards was to sue the US Coast Guard and others involved in the removal of the wreckage, arguing that applicable regulations do not allow the change of lifeguards during of an intervention. This argument did not hold up in court because the settlement includes a lifeguard change provision, known as the Chafee Amendment. The Chafee Amendment may be used by a Federal On-Scene Commander (FOSC) in an OPA 90 response if the FOSC determines that another responder could mount a better or faster response.
Donjon-SMIT lost the case, then immediately resigned from the American Salvage Association (ASA). They then started the OPA Forum 90, a group with a similar vision to the American Salvage Association, but without the other two SMFF vendors that remained in the ASA.
Today we see new language requested by Donjon-SMIT and the OPA 90 Forum in Section 401 of the United States House of Representatives Coast Guard Authorization Act of 2022 (HR6865), which would add the following text to the end of Section 311(c)(3) of the Federal Water Pollution Control Act (33 USC 1321(c)(3)), enacted in OPA 90:
”(C) An owner or operator may not change salvors as part of a deviation under sub-paragraph (B) in cases where the original salvor meets the requirements of the Coast Guard in accordance with the national contingency plan and the applicable response plan required under paragraph (j).
”(D) In all cases where the Coast Guard authorizes a deviation from the assistant as part of a deviation under sub-paragraph (B) from the applicable response plan required under the subparagraph (j), the commander shall submit to the House of Representatives Committee on Transportation and Infrastructure and the Senate Committee on Commerce, Science, and Transportation a report describing the deviation and the reasons for the deviation.
This is an attempt to ensure that, regardless of whether the salvage operation goes well or badly, the OPA 90 assistant retained by the shipowner before the incident occurs is the only company authorized to carry out the salvage operation. This lifeguard is guaranteed to remain on the project until the project is complete, and they cannot be replaced by another contractor unless the U.S. Coast Guard determines that the lifeguard has failed to meet the job plan. shipowner’s response and the National Contingency Plan (NCP) and the US Coast Guard then submits a report to Congress.
The problem with this hurdle is that the US Coast Guard’s requirements for the Shipowner’s Response Plan and NCP only include general response times and capabilities for rescuers, but do not include criteria for the success of the rescue operation. Therefore, as long as the retained assistant appears, it would be nearly impossible under Section 401 for the US Coast Guard to make the required decision, even when the assistant is malfunctioning.
For shipowners, this legislation means that if one of your vessels has problems, you are able to trust that you have selected the right responder, not only for emergency response, but also for removal of the wreckage. A simple wreck removal job can cost between $1 million and $20 million, but a more complex job can cost up to $500 million. While shipowners have a deductible, insurers are responsible for all remaining costs of a salvage operation. Insurers will have to hope that ship owners have thoroughly considered the best OPA 90 companies available with wreck removal capabilities.
OPA 90 was drafted to ensure that there were adequate response capabilities in the United States, as well as a formal mandate agreement in place so that shipowners would not negotiate tariffs while a ship was burning offshore. The OPA 90 regulations were in no way intended to ensure that a stakeholder was guaranteed to stay on a project, regardless of performance or ability. This change would be bad for just about every stakeholder involved. For example, the SMFF responder best positioned to extinguish a fire in the Gulf of Mexico may not be the best company to perform wreck removal on the same vessel should it run aground, capsize or sink in a channel.
Resolve Marine believes that lifeguards should be selected for a project based on their ability and experience in order to provide an effective and efficient solution to the client. We spend a lot of time, energy and capital preparing for an incident and we vehemently oppose laws that give rights to companies that would rather minimize their own capacity investments to reduce costs.
This bill would also put the US Coast Guard in an impossible situation. They would no longer be able to ensure that salvage work is carried out efficiently and successfully and would instead have to rely on the best wreck removal contractor to have been pre-selected by the shipowner. The only lever for the US Coast Guard would be to revise its OPA 90 regulation to specify specific lifeguard performance criteria to be included in the NCP and shipowners’ vessel response plans, but it would take several years for this regulation to become effective. be completed.
Without proper verification of actual response capabilities by shipowners and the US Coast Guard, this legislation will likely result in lower industry investment in US salvage response resources. Since the OPA 90 requires shipowners to retain a salvor, there would be no penalty for not performing salvage work properly, and salvors could save costs by cutting investment in order to underbid over their competitors for mandates that essentially guarantee them all the response work. Is this the system the US House of Representatives wants?
Resolve Marine, along with many other US and international organizations and operators actively oppose this legislation and we hope we can stop it. Unfortunately, this legislation appears to be gaining momentum, so it will take a broad effort to educate Congress about the consequences if it is enacted.
Joseph E. Farrell III is Director of Business Development at Resolve Marine Group.
The opinions expressed here are those of the author and not necessarily those of The Maritime Executive.