Club Circular Rule Changes for 2017

December 2016, To all Members

MARITIME LABOUR CONVENTION 2006 (MLC)

The MLC entered into force on 20 August 2013. To date it has been ratified by some 80 states. These states are listed in alphabetical order on the International Labour Organization (ILO) MLC database which can be accessed on the ILO website.

The MLC applies to ships of all tonnages, whether publicly or privately owned, which are ordinarily engaged in commercial activities.

It does not apply to ships which navigate exclusively in inland waters within, or closely adjacent to, sheltered waters or areas where port regulations apply.

States which have ratified the MLC may also determine, at their discretion, that the MLC should not apply to certain categories of ship, in particular ships of less than 200GT which are not engaged in international voyages. States are obliged to notify the ILO of such determinations which are then recorded on the ILO MLC database against the name of the individual state as National Determinations.

In April 2014 the ILO agreed several amendments to the MLC to implement the principles agreed in 2009 by the joint IMO / ILO financial security working group. These amendments will enter into force on 18 January 2017. After this date ships which are subject to the MLC are required to display certificates (MLC Certificates) issued by an insurer or other financial security provider, such as a social security scheme or national fund, confirming that insurance or other financial security is in place for liabilities in respect of:-

1. Outstanding wages and repatriation of seafarers together with incidental costs and expenses in accordance with MLC Regulation 2.5, Standard A2.5.2.
2. Compensation for death or long term disability in accordance with MLC Regulation 4.2, Standard A4.2.1 paragraph 1(b).

Separate MLC Certificates will be required for (a) and (b).

Ships to which the MLC applies will require MLC Certificates if they are:-

1. registered in a state where the MLC is in force due to that state having ratified the MLC; or
2. calling at a port in a jurisdiction where the MLC is in force.

MLC Certificates are not required by ships which are registered in states where the MLC is not in force and will not call at ports in states where the MLC is in force.

MLC Certificates will be issued by the insurer or other financial security provider, not by the flag states, so the procedure will differ from the blue card and certification procedure adopted for IMO Conventions such as the Bunker Convention but some flag states may require the shipowner to supply them with a copy of the MLC Certificates for their records.

The MLC Certificates provided to the ship may be pdf copies of the documents issued by the insurer or other financial security provider but they should be displayed in a conspicuous location on board the ship where they can be readily seen by the crew.

Although some of the liabilities for which financial security is required fall outside the existing Class 1 (P&I) Rules the Association has decided that it may, subject to certain conditions, assist the Members to comply with these amendments to the MLC 2006. This will require changes to the Class 1 Rules.

The Association will not be in a position to issue MLC Certificates if the terms of entry exclude crew claims or if there are unpaid calls.

The purpose of this Circular is (1) to notify the Members of the proposed rule changes which will come into effect on 20 February 2017 and (2) to explain the procedure for applying to the Association for the issue of MLC Certificates.

RULE CHANGES

Rule changes to take into account the entry into force of the MLC 2006 came into effect on 20 February 2014. To take into account the amendments to MLC 2006 the Directors have decided that the following changes should be made to the Class 1 (P&I) Rules with effect from 20 February 2017.

CLASS I RULE 4 – RISKS COVERED

Subject to the Rules and to the Certificate of Entry, the risks covered by the Association are the risks set out in sub-rules 1 to 26 of this Rule, in respect of costs relating thereto by reason of the liability, loss or expenses (as the case may be) and legal costs of the Member by reason of his interest in an entered ship, PROVIDED ALWAYS that:

1. the Member is only insured to the extent that he has paid and discharged his liability or paid the loss or expense concerned, save for claims arising under sub rule 1 to the extent provided in sub rule 1(vii) and claims arising under sub rule 5(b) or as the Directors in their discretion shall otherwise decide.
2. The Member shall be liable to reimburse the Association in full for any payment made to the Master or a member of crew or his representatives under sub-rule 1(b) and / or sub- rule 5(d) unless and to the extent that cover would otherwise have been available to the Member under the other provisions of sub-rules 1 and 5.
3. Sub-rules 1(b) and 5(d) take effect only as financial security in favour of the Master and crew and are not an extension of cover available to the Member under the other provisions of sub-rules 1 and 5.

Rule 4.1. Loss of life, personal injury and illness

1. Damages, compensation, wages, maintenance, hospital, medical and funeral expenses for which a Member may be liable arising out of loss of life, personal injury or illness of:

1. the Master or a member of crew;
2. any person on board any other ship;
3. any other person.

1. Payment by the Association to the Master or a member of crew or his representative of contractual or statutory claims for compensation for death or long-term disability pursuant to any enactment or provision implementing Regulation 4.2 Standard A4.2.1 paragraph 1(b) of the Maritime Labour Convention 2006 as amended PROVIDED ALWAYS that the Association shall not make any payment under this sub clause if:

1. such payment would be recoverable by the Master or member of crew under a social security scheme, fund, separate insurance or similar arrangement;
2. the exclusions from cover in General Rules 28, 29 and 30 (radioactive, war risks and others, sanctions) apply.

Rule 4.5 Repatriation

1. Repatriation expenses which are not recoverable under sub-rule 1 of this Rule and are incurred under statutory obligation or contract of employment or contract of service or crew agreement approved by the Managers in respect of the Master or member of crew PROVIDED ALWAYS that there shall be no recovery when the expenses result from the termination of a contract of employment or contract of service following the expiry of notice given in accordance with the terms of the relevant contract or termination as a result of discharge by mutual consent or breach by the Member of any such contract or from any other discretionary act of the Member or from the sale of the entered ship.

1. The cost of repatriation or deportation necessarily incurred by reason of a member of crew having been left ashore or abandoned PROVIDED ALWAYS that there is a statutory obligation to pay such costs or there is a liability to pay such costs under any statutory enactment or domestic legislation giving effect or equivalent to the Maritime Labour Convention 2006 and such costs are not otherwise recoverable under this Rule.

1. Expenses necessarily incurred by a Member in discharging his statutory obligations towards, or making necessary arrangements for, stowaways, refugees, Masters or members of crew who go on strike or deserters PROVIDED ALWAYS that the Member shall take or has taken all appropriate steps permitted by law to recover such expenses from the stowaway, refugee, Master or member of crew who go on strike or deserter or from any other person or insurer or from any national or international bodies or organizations concerned with such persons.

1. Payment by the Association of maintenance, repatriation expenses, outstanding wages and entitlements due to the Master or member of crew pursuant to any enactment or provision implementing Regulation 2.5, Standard A2.5.2 of the Maritime Labour Convention 2006 as amended PROVIDED ALWAYS that the Association shall not make any payment under this sub clause if:

1. such payment would be recoverable by the Master or member of crew under a social security scheme, fund, separate insurance or similar arrangement;
2. the exclusions from cover in General Rules 28, 29 and 30 (radioactive, war and other risks, sanctions) apply.

APPLICATION PROCEDURE

Members requiring MLC Certificates to be issued on their behalf should complete, sign and submit to the Association an Application Form, including the Undertaking and Agreement, in the attached wording.

Definition of a Member in Rule I of the General Rules is amended to read “A person who has a ship, vessel, unit or craft entered into one or more of the classes of Maritime Mutual Insurance Association (NZ) Limited and/or is entered on the registry of Members of Maritime Mutual Association Limited and/or is a beneficiary of the Maritime Mutual Trust”

Rule Change

Class I Rule 4 1 (vi) amended to read: “there shall be no recovery in respect of pre- existing medical conditions or death by natural causes.”

Yours faithfully

The Board of Directors

Maritime Mutual Insurance Association (NZ) Limited

MARITIME MUTUAL

Application for Certificate(s) of Financial Security under (a) Regulation 2.5, Standard A2.5.2 and / or (b) Regulation 4.2 Standard A4.2 paragraph 1(b) of the Maritime Labour Convention 2006 as amended (MLC Certificates)

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To Maritime Mutual Insurance Association (NZ) Ltd (‘the Association’)

We hereby apply for the issue of the following Certificate(s) of Financial Security:

Details of Vessel: Vessel name: Port of registry: Call sign:

IMO number:

Registered Owner (Applicant):

MLC Certificates required: (Please tick the appropriate box(es))

1. Certificate for shipowners’ liability arising under Regulation 2.5, Standard A2.5.2 (repatriation costs, maintenance, contractual wages and entitlements). □

1. Certificate for shipowners’ liability arising under Regulation 4.2, Standard A4.2 paragraph 1(b) (contractual payments for death or long term disability). □

Period of Validity of Certificate(s): Agreement and Assignment:

In consideration of your agreeing to issue the above Certificates at our request we hereby

undertake and agree that:

1. We and all Joint Members / Joint Assureds under the same entry will be bound by the terms of this Undertaking and Agreement.
2. We shall, if so requested by the Managers of the Association, assign to the Association the rights of the Member under any social security scheme, or other insurance, national fund or other similar arrangement where such scheme, insurance, national fund or arrangement applies in respect of all or any liabilities arising under the MLC Certificate(s).

Maritime Mutual Insurance Association (NZ) Limited Registered in New Zealand

Incorporated under the Companies Act 1993 reg. no. 1521418

Managers: Maritime Management Establishment, Landstrasse 36, 9495 Triesen, Liechtenstein.

Telephone no.: +423 232 95 07 Fax no.: +423 232 95 08 www.maritime-mutual.com

1. We shall reimburse the Association in full for any payment made to the Master or a member of crew or his representatives arising under the MLC Certificate(s) unless and to the extent that cover would otherwise have been available to the Member under Class 1 (P&I) Rules 4.1 and 4.5.
2. Within 30 days of notice to us and / or the Flag State of the Vessel of the termination thereof we shall remove from the Vessel the Certificate(s) of Financial Security issued in pursuance of this request and any copies thereof and return them to the Association.
3. This Undertaking and Agreement shall apply in favour of the Association in respect of the policy year(s) for which this request is made and in respect of all future policy years in which we agree to enter in the Association the Vessel in respect of which the Association agrees to issue MLC Certificate(s).
4. This Undertaking and Agreement shall remain in full force and effect in respect of the above Vessel for the duration of the entry in the Association by the Member and shall remain so notwithstanding any alterations to the MLC Certificate application details set out above. This Undertaking and Agreement shall be governed by and construed in accordance with New Zealand law and any disputes shall be dealt with according to the provisions of General rule 44.

Dated:

Signed:

(Authorised Signatory)