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MEO CLASS 1 · ORAL QUESTION 66

Scopic? Why it came into picture?

Answer

SCOPIC- Special Compensation P&l Club Clause.

Scopc was introduced due to shortcomings reported by both Shipowners and Salvors. 

Salvors Concern-
1. Onus of proof of Environmental damage.

2. Geographical restrictions of Coastal waters, Inland waters and areas adjacent to it.

Shipowners concern-
1.Delay by salvors to let the damage turn to Environmental damage (high risk).

2.Uplift for the salvors was too high.

3.Tariff rates for additional services/ equipment by salvors was not fixed and led to inflated charges borne by the shipowner.

To fix these issued, the International Salvage Union (ISU), the International Group of P&I Clubs, and property underwriters came together in 1999 and created SCOPIC as an optional, pre-negotiated tariff regime.
SCOPIC can be incorporated in the agreement beforehand, but can be invoked later. 

How SCOPIC Works in Practice
  1. Invocation by Salvor: The salvor can invoke the SCOPIC clause at any time during a salvage operation, at their own discretion—regardless of geographical position or whether an environmental threat can be proven.

  2. Fixed Tariff Rates: Once invoked, the salvor stops relying on Article 14 and is paid based on fixed, pre-agreed hourly/daily SCOPIC tariff rates for tugs, personnel, and equipment, plus a fixed 25% uplift.

  3. P&I Club Financial Security: Within 2 working days of SCOPIC being invoked, the shipowner's P&I Club must provide financial security (up to US$ 3 million) to guarantee the salvor’s payment.

  4. Special Casualty Representative (SCR): A neutral technical expert (SCR) is appointed to  oversee the Salvage operation to decide Rewards/ Out of pocket expenses.