MLC – requirements of financial security

In April 2014 the International Labour Organization (ILO) approved several amendments to the Maritime Labour Convention (MLC), a Convention that became effective in August 2013. These amendments became effective on January 18th 2017.

Thereafter and in accordance with the Convention, ships shall be provided with certificates or other documents that establish the existence of financial security or compulsory insurance accountable for compensation payment in case of abandonment, death or long-term disability as a consequence of hazard, occupational disease or injury under the responsibility of the shipowners; to cover all the expenses and costs of repatriation of the crew; as well as provide for the settlement of contractual right of up to 4 months for delayed payment of wages and benefits after the abandonment.

Foreign ships, which enter ports in the states where MLC 2006 is effective, will be inspected by the relevant authorities in the port in order to verify the conformity with the amendments that have been effective since January 18th of this year, and will have to present certificates or other documentary evidences that confirm the existence and validity of the aforementioned security.

This kind of regulations is to prevent the repetition of such situations that were experienced in the past. We shall not forget that, in case of abandonment of the ship, the seafarers used to remain on board of the abandoned ship until she was subjected to judicial sale in order to settle the outstanding claims, including unpaid wages of the crew, with the obtained amount.