What Financial Security Is Required Under MLC 2006?
The MLC mandates that in relation to repatriation [Regulation 2.5] and seafarers’ sickness, injury or death, occurring in connection with their employment [Regulation 4.2], States Parties to the Convention will require ships flying their flag to maintain “financial security” in respect of such claims.
What Financial Security Is Required Under MLC 2006?
The MLC mandates that in relation to repatriation [Regulation 2.5] and seafarers’ sickness, injury or death, occurring in connection with their employment [Regulation 4.2], States Parties to the Convention will require ships flying their flag to maintain “financial security” in respect of such claims.
Financial security is not defined and the MLC does not prescribe the form or any amount of coverage – unlike the IMO liability and compensation regimes. The MLC does not require “blue cards” and does not presently impose a right of direct action against the provider of financial security. Each individual State can determine the precise form of financial security in its domestic legislation to implement the Convention, and some form of evidence (such as proof that insurance is in place) is likely to be required to satisfy the requirement of financial security for claims for repatriation [Regulation 2.5] and seafarers’ sickness, injury or death occurring in connection with their employment [Regulation 4.2].
A P&I Club Certificate of Entry may be accepted as evidence of financial security. States have not yet formally confirmed this, and they could make additional requirements for claims which might fall outside the scope of Club cover. However, the International Group is not aware that any State currently intends to impose such requirements. Different States may take different views on what constitutes appropriate evidence of financial security – and at this stage there is no guarantee that States will take a consistent approach to the financial security provisions, in particular, in relation to the repatriation costs as per Regulation 2.5 of the Convention.
What Are The Key Requirements Regarding Repatriation Of Seafarers Under The Convention?
Standard A.2.5.1 of the Convention provides that seafarers are entitled to repatriation in the following circumstances:
(a) if the seafarers’ employment agreement expires while they are abroad;
(b) when the seafarers’ employment agreement is terminated:
(i) by the shipowner; or
(ii) by the seafarer for justified reasons; and also
(c) when the seafarers are no longer able to carry out their duties under their employment agreement or cannot be expected to carry them out in the specific circumstances. Guideline B.2.5.1(b) of the Convention gives further details of the circumstances where seafarers are entitled to repatriation:
(i) in the event of illness or injury or other medical condition which requires their repatriation when found medically fit to travel;
(ii) in the event of a shipwreck;
(iii) in the event of the shipowner not being able to continue to fulfil their legal or contractual obligations as an employer of the seafarers by reason of insolvency, sale of ship, change of ship’s registration or any other similar reason;
(iv) in the event of a ship being bound for a war zone, as defined by national laws or regulations or seafarers’ employment agreements, to which the seafarer does not consent to go, and
(v) in the event of termination or interruption of employment in accordance with an industrial award or collective agreement or termination of employment for any other similar reason.
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