Pre-emptive action urged in handling China wrecks

Henry Lee, partner at Shanghai shipping law firm Sloma & Co told the 5th Asia Marine Insurance Conference that "My clients, especially foreign clients are deeply concerned about the transparency of the salvage or wreck removal operations that are done with the involvement of the authorities in China."

He added that almost all salvage operations in China are conducted with the involvement of MSA either directly or indirectly.

He noted that there are two types of wreck removal in China: compulsory and non-compulsory. Lee said that while in theory MSA is supposed to give owners the chance to voluntarily remove wrecks within a "reasonable period of time", this period is indeterminate and owners are encouraged to proactively approach MSA well in advance. The risk is that if this is not done, MSA may engage their own third party contractors to remove the wreck at high cost which would then be passed on to the owners.

In response to a question about what comprises a "reasonable period of time", Lee had no clear answers only suggesting that it is usually less than what owners would think it is and therefore reiterating that they reach out to the MSA pre-emptively to inform them that they will be taking action, thus saving added costs later.