The International Group of Protection and Indemnity Clubs used a panel session at this year’s P&I Clubs Correspondents Conference to discuss the details of the impact of the 2014 MLC amendments regarding seafarer liability and compensation.
Since 18 January 2017 ships covered by the duties and obligations set out in the International Labour Organisation’s 2006 Maritime Labour Convention, as amended, are required to maintain financial security for specific liabilities to crew members in the event of their abandonment. In order to meet this requirement on shipowners, the International Group Clubs have agreed to provide the certification required under the Convention and have arranged reinsurance cover which provides US$200m MLC abandonment cover.
This IG MLC reinsurance arrangement has been developed to ensure that shipowners can demonstrate compliance with the requirements of the 2014 amendment to the MLC, requiring vessel owners to maintain financial security for the cost and expense of crew repatriation in cases of seafarer abandonment, including liability for up to four months’ arrears of wages and entitlements. A separate financial security certificate is required for contractual claims arising from seafarer personal injury, disability or death.
Andrew Bardot, Secretary and Executive Officer, International Group of P&I Clubs, commented:
“The provision of Certificates backed up by this particular reinsurance arrangement is a significant move for the IG, and all of our member Clubs, who have worked closely together to develop a means for providing owners with the additional financial cover that they need to meet the latest MLC requirements. The reality is that they would not have been able to do this on the commercial insurance market on the same terms. By developing a solution that spreads both the risk and the cost of these requirements across the global fleet, the IG can provide owners with a commercially viable solution to a regulatory requirement that was needed in order to enhance the welfare of our crew. It is an important step forward for all parties involved.”
As a member of the industry panel selected to discuss the impact of MLC and the role of P&I correspondents, Jonathan Hare, senior vice president and general counsel of Skuld commentated:
“The collective agreement developed by IG and provided through its member clubs offers a boon to owners on MLC amendments, which could otherwise have proven very costly. But of course, addressing the issue of abandonment is not purely financial. It is about providing support to crews when they need it most – ensuring that they have access to food and water, fuel and medical supplies while they are awaiting repatriation; working to secure visas and repatriation travel, and paying unpaid wages.
“The role of P&I correspondents in providing this critical link between the insurance providers and the crew onboard, in acting as a conduit in working with seafarers’ representatives such as the ITF and organisations such as the Mission to Seafarers and the work they do to in ensuring care is exercised in all cases of abandonment, should not be overlooked. We’re fortunate to have the opportunity to gather so many of our Correspondents in one room this week, and remind them how important they are to us, and the shipping companies we represent worldwide.”
The International Group Correspondents Conference us being held at the QEII Centre in London. More than 700 correspondents and IG Club managers have gathered for the two-day conference, hosted by the IG every four years.