The contracts are RESPONSECON, for international use, and RESPONSECON US, for use in the United States of America, and they have been produced in collaboration with; the International Group of P&I Clubs, the International Salvage Union (ISU) and the Spill Control Association of America. Both agreements are accompanied by detailed Explanatory Notes which set out the reasoning behind, and the intended operation of, the various clauses.
It is the first time that an industry standard set of terms will be available and the fact they have been produced by representatives of both shipowners and spill responders means that they should offer a fair set of terms which can be signed up to quickly without the need for protracted negotiation. They also contain provisions so that response efforts can be mobilised whilst rates and charges are agreed; this should save critical time at the outset of an incident with the result that pollution damage is kept to a minimum.
Prior to their development an adapted LOF agreement was often used for clean-up however LOF is not suited to spill response requirements as salvage and clean-up are very different operations. When an incident, for example a collision or grounding, which gives rise to a spill, occurs, salvors are appointed to undertake the salvage operations to save property and prevent damage to the marine environment. Clean up is a different operation and until now contractors have produced their own agreements and every company will have very different terms meaning that negotiations can be protracted and cause delay to the clean-up action required. It was recognised that a standard set of terms to be used for spill response would be hugely beneficial to the industry and following a suggestion made by the ISU, ISCO approached BIMCO for assistance in developing an industry standard contract for the deployment of spill response equipment and personnel.
The terms of the agreements follow the already established IG Guidelines for Vessel Response Plan Contracts; however, their application is not limited to shipping incidents or shipowner counterparties. The party which requires the response services is defined as “the Requesting party” to allow for a range of potential client users and also to avoid confusion with the US concept of the “Responsible Party” under the US Oil Pollution Act 1990. Possible Requesting Parties envisaged which extend beyond the traditional maritime setting are: pipeline operators, oil companies and regional and national government authorities. The party providing the response services is defined as “the Contractor”.
The agreement is a framework which covers the essential components of the parties’ relationship and is based on the Contractor providing equipment and personnel to the required onsite location to carry out the clean-up operations. It is recognised that mobilisation should occur without delay and therefore this can be done before rates are agreed. The Contractor’s need for cash-flow is also protected and there is a provision for 80% of estimated mobilisations charges to be paid within three working days from the start of mobilisation. Although less likely to occur, there is a provision allowing for the hire of equipment only which can be changed to include personnel too if the need arises.
Consideration is also given to the need for control over information provided to the media and in this regard the contract requires all media and press communications be channelled through the Requesting Party.
The option of London or Singapore is provided for in the dispute resolution clause, so the contracting parties can determine between themselves which forum would be best suited for their arrangement.
Since legislation in the US requires shipowners to maintain pre-agreed contracts with approved Oil Spill Removal Organisations (OSROs) when trading to the US, shipowners should already have a contract in place to enable spill response action to be taken. RESPONSECON US therefore has been developed for a situation where further resources are required by local contractors; so in the US it would be used as a contract of necessary and not an OSRO contract. Many of the provisions are similar in both RESPONSECON and US RESPONSECON; an obvious difference is the dispute resolution clause and the US contract provides for New York jurisdiction which should be better suited to disputes arising out of operations in US waters.
As stated above, the agreements are a framework and parties remain free to make amendments as they see fit. However, given that so much time and effort has gone into their production, extensive amendments should not be required – as they provide a good level playing field for both contractual counterparts. Members are advised to check with the Club should they be considering entering the agreement with variations to ensure the contract remains within the scope of International Group Guidelines.