'The Seafarers' Charter': P&I Clubs Clarify Financial Obligations
Press Release/UK P&I Club
Monday, May 27, 2013
Entry into force of the Maritime Labour Convention, 2006 (MLC) Circular 10/13:
International Group P&I clubs clarify financial aspects.
Outline
The International Group clubs have agreed to extend standard P&I cover to
include repatriation in cases of insolvency and other circumstances listed in
the MLC
Currently, there is no requirement to provide financial security for unpaid
wages under MLC
Seafarer death and disability claims due to occupational injury, illness or
hazard provided for in MLC are already covered under standard P&I rules
This circular refers to Circular 8/13 - Entry into force of the Maritime Labour
Convention, 2006 (MLC)
"Dear Sirs
ENTRY INTO FORCE OF THE MARITIME LABOUR CONVENTION, 2006 (MLC) - FINANCIAL
SECURITY REQUIREMENTS
Members are referred to the previous circular issued in March this year on the
Maritime Labour Convention (MLC). The imminent entry into force of the MLC has
brought the Convention and its requirements on shipowners into focus and in
particular the financial security requirements established in the Convention.
By way of clarification and for Members' guidance, the financial security
requirements on shipowners set out below will become effective with the entry
into force of the MLC on 20 August 2013.
Financial Security Requirements on Shipowners
Standard A2.5 Repatriation
This Standard and accompanying Guidelines provide that seafarers must be
repatriated at no cost to themselves; outlines the circumstances in which
seafarers are entitled to repatriation, and requires that shipowners shall
provide financial security for the liabilities established in the Standard.
Members will be aware that, in order to assist in complying with these
financial security requirements, all 13 International Group (IG)Clubs have
agreed to extend the scope of standard P&I cover to include repatriation in
cases of insolvency and in the other circumstances listed in the MLC where
seafarers are entitled to repatriation.
This Standard does not include a provision concerning outstanding unpaid
wages. Liability for unpaid wages following abandonment is a feature of the
principles agreed in the International Labour Organisation (ILO) in 2009, but
these principles are not applicable at this stage and there is no requirement
in the MLC to provide financial security by way of insurance cover for unpaid
wages. The ILO principles are subject to further discussion and negotiation,
and to take this forward ILO has scheduled a meeting for April 2014. It will
then take several years for the principles to be considered and finalised in
ILO, and then implemented in State Parties to the MLC. The current position,
therefore, is that unpaid wages are not covered by the MLC and there is no
requirement to provide financial security for such wages.
Regulation 4.2 Shipowners' Liability (for sickness, injury or death)
The MLC provides that States Parties shall ensure that seafarers on vessels
flying their flag are entitled to compensation in the event of death or long
term disability due to an occupational injury, illness or hazard as set out in
national law, the seafarer's employment agreement or collective agreement and
that there must be financial security for such compensation. Such claims are
generally already covered under the standard P&I cover provided by a member's
P&I club entry for, subject to the club rules.
Standard 1.4 Recruitment and Placement
The MLC does not introduce a requirement on shipowners to provide financial
security in respect of the recruitment of seafarers. The MLC imposes certain
duties and obligations on State Parties to the Convention; agencies involved in
recruitment and placement services may be subject to specific licencing
requirements, but this is a matter for each State Party to consider when
implementing the Convention.
Standard 2.2 Wages
The MLC does not introduce an obligation on shipowners to maintain financial
security for unpaid wages to seafarers. It does, however, introduce obligations
on State Parties who will require that seafarers receive payment in accordance
with their employment agreements. Such obligation to pay seafarers wages is
likely to be incorporated in the existing national law of each State Party.
Accepting Certificates of Entry as Evidence of Financial Security
The IG has been in regular contact with the Competent Authority in each State
Party to the MLC, to obtain confirmation that an IG club certificate of entry
will be accepted as evidence of shipowners' financial security. To date 13
States have confirmed they will accept a certificate of entry, and several more
are considering the issue as they develop their national implementing
legislation. No State Party has refused to accept a club certificate of entry.
Members should contact the club for an up-to-date list of those State Parties
that have provided such a confirmation.
All clubs in the International Group have issued similar Circulars.
Yours faithfully
THE MANAGERS"
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