The Boards of all Clubs in the International Group have decided that Clubs should provide the necessary certification confirming that insurance or other financial security is in place for liabilities in respect of outstanding wages and repatriation of seafarers together with incidental costs and expenses in accordance with MLC Regulation which enters into force on 18 January 2017.
The purpose of this Circular is to provide an update to operators regarding the steps which are being taken to enable the operators to meet the financial security requirements.
Ships requiring MLC Certificates
Ships will require MLC Certificates if they are
- registered in a state where MLC is in force; or
- calling at a port in a jurisdiction where MLC is in force
Details of States which are party to MLC can be found in the MLC Database maintained by the International Labour Organisation. MLC Certificates are not required by ships registered in States which are not party to MLC and which will not call at States which are party to MLC.
Process
All Clubs in the international Group will shortly provide information to operatorss about the process for obtaining Certificates. The Certificates will be sent to operators by their Clubs in PDF format based upon the wordings in Annexes 1 and 2 of this circular. Operators must then print the Certificates and ensure that they are posted in a conspicuous place on board where they are available to seafarers no later than 18 January 2017.
Once the Certificates are issued, they will be recorded on the ship search facility on the Club’s website. The Certificates are provided by the Club and there is no need to apply for State issued Certificates. However, some States may require shipowners on their register to supply copies of the Certificates for their records.
Members who intend to renew their P&I Cover with the UK Club at 20th February 2017 will be able to obtain certificates which are valid up to 20th February 2018.
Insurance
Some of the liabilities arising under the Certificates will fall within the scope of standard P&I cover for crew. For example, the UK Club’s Rules will normally cover compensation for death or long term disability. Similarly, repatriation costs and wages following a shipwreck form part of standard cover. However other liabilities fall outside the scope of P&I cover, in particular repatriation costs and wages arising from the abandonment provisions set out in Standard 2.5.2 of the MLC, as amended.
Clubs are able to provide Certificates on the basis set out in the MLC Extension Clause which appears in Annex 3. This provides that the Club will pay claims advanced by seafarers which fall within the scope of the Regulations and Standards specified in the Certificates. The Clause also provides that if such payments fall outside the scope of standard cover, operators will be obliged to reimburse the Club.
Reinsurance
Claims which fall outside the scope of P&I cover will also fall outside of the scope of the International Group’s pooling and reinsurance arrangements. The Group has arranged additional reinsurance cover for liabilities arising under the MLC Extension Clause and falling outside the scope of cover. The reinsurance placement is at an advanced stage and will be at a level which is sufficient for all operators, with the possible exception of a small number of fleets with exceptionally high crew numbers.
The aim has been to provide a system for security which meets with the requirements of MLC and is accepted in all States where MLC is in force.
Further details may be found in the circular herebelow
Source: UK P&I Club
