SCOPIC - the Special Compensation P&I clause was introduced in August 1999 to provide an alternative to Article 14 of LOF in order to allow a simplified method for dealing with special compensation under salvage contracts.
The clause provides that the SCR committee (comprising 3 representatives from ship-owners, salvors, property insurers and the P&I Clubs) should review the SCOPIC rates for personnel and equipment on an annual basis.
In order to ensure that salvors undertake salvage work, and thereby protect the environment, in cases where the chances of saving property are doubtful, it has always been the intention that SCOPIC rates be generous and encouraging and, in that sense, “profitable”.
As reported in Sea Venture Issue 5, reviews in previous years had resulted in a 10% increase in personnel rates with effect from 1st January 2006 and a moratorium on SCOPIC rate increases for tugs and portable salvage equipment until September 2006 to allow time for a review as to the actual daily cost of this equipment.
Whilst it was not possible to obtain any meaningful information as to tug rates, information was provided regarding portable salvage equipment which suggested that an increase in rates was appropriate and that the current market rates for tugs was far in excess of current SCOPIC rates.
Accordingly, following prolonged discussions between all relevant sectors of the industry, it was agreed that SCOPIC rates for tugs be increased by 25%, SCOPIC rates for portable equipment be increased by 15%, and SCOPIC rates for personnel be increased by a further 5%. These new rates apply to LOF Agreements entered into after 1st July 2007 and are fixed until at least 31st December 2010.
In addition, it was agreed that Article 18 of the 1989 Salvage Convention - which enables claims to be made against the salvor in the event of his negligence during a salvage operation - would be incorporated into the SCOPIC Clause.
Finally, it was agreed in the recent discussions that the parties to the SCOPIC Clause will work to introduce a mutually acceptable review procedure in good time for the next review, so as to hopefully avoid the problems which delayed the current review.
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