Statutory Alert: Amendments to MLC, 2006 on financial security – entry into force Applicability: All shipowners and managers
Please note: this Class News is a reissue and replaces the version sent on 22 August 2016. It has been amended following a number of flags confirming their intention to implement the Resolution adopted at the meeting of the Special Tripartite Committee in 2014.
The 2014 amendments to the Maritime Labour Convention 2006 will come into force on 18 January 2017.
The changes relate to financial security and are as follows.
Standard A2.5.2 – Financial Security
This standard requires a financial security system to be provided to assist seafarers in the event of abandonment. The standard defines abandonment as:
when the shipowner fails to cover the cost of the seafarer’s repatriation; or
when the shipowner has left the seafarer without the necessary maintenance and support; and
when the shipowner has otherwise unilaterally severed their ties with the seafarer, including failure to pay contractual wages for a period of at least two months.
Ships will have to carry a certificate or other documentary evidence of financial security on board, as issued by the financial security provider. New Appendix A2-1 will detail the information required to be on the certificate or other documentary evidence.
Standard A4.2.1 – Shipowner’s Liability
This standard sets out the minimum requirements for a system of financial security that assures compensation in the event of a contractual claim (see the definition under Standard A4.2.2 below). Again, ships will be required to carry a certificate or other documentary evidence of financial security issued by the financial security provider.
Standard A4.2.2 – Treatment of Contractual Claims
This standard defines a ‘contractual claim’ as “any claim which relates to death or long-term disability of seafarers due to an occupational injury, illness or hazard as set out in national law, the seafarers’ employment agreement or collective agreement.”
The standard also requires that effective means are in place to deal with and settle contractual claims for compensation.
Appendices A4-1 and B4-1
Appendix A4-1 details the evidence of financial security that is required. Appendix B4-1 details a model receipt and release form, referred to in new Guideline B.4.2.2.
Where there is more than one financial security provider for repatriation or shipowner’s liability, documentary evidence from each provider shall be carried on board.
What the changes mean for the Declaration of Maritime Labour Compliance (DMLC)
It is not intended that the amendments should affect the validity of maritime labour certificates or declarations of maritime labour compliance already issued (see resolution on transitional measures relating to the entry into force of the amendments). No immediate changes will be required to the DMLC unless otherwise instructed by a flag administration. Maritime labour certificates and declarations of maritime labour compliance will be issued or renewed no later than the date of the first renewal inspection following the entry into force of the amendments.