27th September 2017

P&I Correspondents “critical link” for at-risk seafarers

Client news

Monday 25 September 2017, London -  Since 18 January 2017 ships that are covered by the duties and obligations set out in the International Labour Organisation’s 2006 Maritime Labour Convention (MLC), as amended have been 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 and facilitate the smooth entry into force of this important measure for seafarers, the International Group Clubs have agreed to provide the certification required under the Convention and have arranged reinsurance cover which provides in total USD200 million 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 (MLC Standard A4.2, as amended).
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.”

The details of the impact of the 2014 MLC amendments regarding seafarer liability and compensation was discussed at length during a dedicated ‘People Risks’ panel-session at the International Group of P&I Cubs Correspondents Conference, currently underway at the QEII Centre in London.

The industry panel was chaired by Birgitta Hed, Senior Claims Manager, The Swedish Club (IG Personal Injury Subcomittee), and Jonathan Hare, Senior Vice President and General Counsel of Skuld, and Chairman of IG Compulsory Insurance Subcommittee, joined by Katie Higginbottom, Projects and Campaigns Leader for The International Transport Worker’s Federation (ITF), and Andrew Wright, Secretary General of the seafarer’s welfare charity Mission to Seafarers.

Jonathan Hare, commented:

“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 currently 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, to listen to updates on a range of issues affecting the industry, with more than 40 speakers from across the P&I and wider maritime industry.

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