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Maritime Labour Convention 2006 (MLC): Financial Security Requirements

In April 2014, the International Labour Organisation (ILO) agreed on several amendments to the MLC, which have been agreed on back in 2009 by the joint IMO/ILO financial security working group. As per Circular No 2016/16 issued by the Group Director of The North of England P&I Association limited, these amendments will be applicable as of 18 January 2017.

Accordingly, after the implementation date, all ships registered in a state where MLC is in force or calling at a port of jurisdiction where MLC is in force will have to display certificates issued by an insurer or other financial security provider confirming that insurance or other financial security is in place for liabilities in respect of

  • The cost and expense of crew repatriation along with an up to four months contractually entitled arrears of wages and entitlements following abandonment in accordance with MLC Regulation 2.5.2, as amended; and
  • Contractual claims arising from seafarer personal injury, disability or death in accordance with Regulation 4.2 as amended.

For easy implementation of the amendments, all 13 International Group (IG) Clubs agreed on providing the necessary MLC certification by way of an extension clause to the P&I rules and indemnify the seafarers directly should the requisite MLC event occur. However, a right of indemnity of Members will be in place meaning that the Members will be obliged to reimburse the Club where the new MLC liabilities will not fall within the Club’s existing standard cover.

Further, it is agreed by the IG Clubs that they will participate in a separate group reinsurance agreement, in the event a Club becomes liable for its Members’ financial default resulting in a seafarer abandonment.

The certificates will be provided by the Club and upon their issuance, they will have to be posted in a conspicuous place on board in order to be available to seafarers until the 18 January 2018.